Delaware |
3841 |
94-0980861 | ||
(State of Incorporation) |
(Primary Standard Industrial Classification Code Number) |
(IRS Employer Identification No.) |
Wesley Holmes Mark Bekheit Latham & Watkins LLP 140 Scott Drive Menlo Park, California 94025 (650) 328-4600 |
Jonn R. Beeson, Esq. Jones Day 3161 Michelson Drive, Suite 800 Irvine, California 92612 (949) 553-7528 |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer |
☒ | Smaller reporting company | ||||
Emerging growth company |
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Title of each class of securities to be registered |
Amount to be registered (1) |
Proposed maximum offering price per share (2) |
Proposed maximum aggregate offering price (2) |
Amount of registration fee (3) | ||||
Class A Common Stock, $0.001 par value per share |
18,322,984 |
$25.95 |
$268,985,195.25 |
$29,346.28 (4) | ||||
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(1) |
The number of shares of class A common stock, par value $0.001 per share (“Bioventus class A common stock”), of the registrant, Bioventus Inc. (“Bioventus”), being registered is based upon the estimated maximum number of shares of Bioventus class A common stock issuable upon completion of the merger of Oyster Merger Sub I, Inc., a wholly owned subsidiary of Bioventus (“Merger Sub I”), with and into Misonix, Inc. (“Misonix”), with Misonix as the surviving corporation, described in the joint proxy statement/prospectus contained herein, and is calculated by assuming that the stock election consideration is oversubscribed by holders of Misonix common stock, which results in proration of the stock election consideration based on the maximum cash amount. |
(2) |
Estimated solely for purposes of calculating the registration fee required by Section 6(b) of the Securities Act of 1933, as amended (the “Securities Act”), and calculated in accordance with Rules 457(c), 457(f)(1) and 457(f)(3) promulgated thereunder. The proposed maximum aggregate offering price is solely for the purposes of calculating the registration fee and was calculated based upon the market value of shares of Misonix common stock (the securities to be cancelled in the merger) in accordance with Rule 457(c) under the Securities Act as follows: (a) the product of (i) $25.95, the average of the high and low prices per share of Misonix common stock on September 7, 2021, as quoted on the Nasdaq Global Market, and (ii) 17,410,045, the estimated number of shares of Misonix common stock estimated to be outstanding immediately prior to the merger based on the number of shares presently outstanding, minus (b) $182,805,472.50, which is the estimated maximum amount of cash consideration to be delivered in the merger based on the number of shares of Misonix common stock presently outstanding. |
(3) |
Calculated pursuant to Section 6(b) of the Securities Act at a rate equal to $109.10 per $1,000,000 of the proposed maximum aggregate offering price. |
(4) |
Paid in connection with the initial filing of this registration statement. |
Ken Reali Chief Executive Officer Biovenuts Inc. |
Stavros Vizirgianakis Chief Executive Officer Misonix, Inc. |
1. | to approve the issuance of shares of Bioventus class A common stock to the stockholders of Misonix, Inc., which is referred to as “Misonix,” in connection with the merger contemplated by the Agreement and Plan of Merger, dated July 29, 2021, as it may be amended from time to time, which is referred to as the “merger agreement,” by and among Bioventus, Oyster Merger Sub I, Inc., a wholly owned subsidiary of Bioventus, Oyster Merger Sub II, LLC, a wholly owned subsidiary of Bioventus and Misonix, which issuance is referred to as the “share issuance” and which proposal is referred to as the “Bioventus share issuance proposal”; and |
2. | to approve the adjournment of the Bioventus special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Bioventus special meeting to approve the Bioventus share issuance proposal or to ensure that any supplement or amendment to the accompanying joint proxy statement/prospectus is timely provided to Bioventus stockholders, which proposal is referred to as the “Bioventus adjournment proposal.” |
• |
“FOR” the Bioventus share issuance proposal; and |
• |
“FOR” the Bioventus adjournment proposal. |
1. | to adopt the Agreement and Plan of Merger, dated July 29, 2021, as it may be amended from time to time, which is referred to as the “merger agreement,” by and among Bioventus Inc. (which is referred to as “Bioventus”), Oyster Merger Sub I, Inc., a wholly owned subsidiary of Bioventus, Oyster Merger Sub II, LLC, a wholly owned subsidiary of Bioventus, and Misonix, a copy of which is attached as Annex A to the accompanying joint proxy statement/prospectus and which proposal is referred to as the “Misonix merger proposal”; |
2. | to approve, on a non-binding advisory basis, the compensation that may be paid or become payable to Misonix named executive officers that is based on or otherwise relates to the transactions contemplated by the merger agreement, which proposal is referred to as the “Misonix compensation proposal”; and |
3. | to approve the adjournment of the Misonix special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Misonix special meeting to approve the Misonix merger proposal or to ensure that any supplement or amendment to the accompanying joint proxy statement/prospectus is timely provided to Misonix stockholders, which proposal is referred to as the “Misonix adjournment proposal.” |
• |
“FOR” the Misonix merger proposal; |
• |
“FOR” the Misonix compensation proposal; and |
• |
“FOR” the Misonix adjournment proposal. |
For Bioventus stockholders: |
For Misonix stockholders: | |
Bioventus Inc. Attention: Corporate Secretary tony.dadamio@bioventus.com (919) 474-6700 |
Misonix, Inc. Attention: Secretary misonixproxy@misonix.com (631) 694-9555 |
• | “Bioventus” refers to Bioventus Inc., a Delaware corporation; |
• | “Bioventus adjournment proposal” refers to the proposal to approve the adjournment of the Bioventus special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Bioventus special meeting to approve the Bioventus share issuance proposal or to ensure that any supplement or amendment to the accompanying joint proxy statement/prospectus is timely provided to Bioventus stockholders; |
• | “Bioventus board” refers to the board of directors of Bioventus; |
• | “Bioventus class A common stock” refers to the Class A common stock, par value $0.001 per share, of Bioventus; |
• | “Bioventus class B common stock” refers to the Class B common stock, par value $0.001 per share, of Bioventus; |
• | “Bioventus common stock” refers Bioventus class A common stock and the Bioventus Class B common stock; |
• | “Bioventus LLC agreement” refers to the Second Amended and Restated Limited Liability Company Agreement of Bioventus LLC dated as of February 16, 2021; |
• | “Bioventus record date” refers to [●], 2021; |
• | “Bioventus share issuance proposal” refers to the proposal to approve the issuance of shares of Bioventus common stock to Misonix stockholders in connection with the mergers; |
• | “Bioventus special meeting” refers to the special meeting of Bioventus stockholders to consider and vote upon the Bioventus share issuance proposal and the Bioventus adjournment proposal; |
• | “BV LLC” refers to Bioventus LLC, a subsidiary of Bioventus Inc.; |
• | “cash election consideration” refers to an amount of cash equal to $28.00, without interest, which reflects the amount of cash that Misonix stockholders will be entitled to receive in the first merger for each share of Misonix common stock held immediately prior to the effective time, if such stockholder elects the cash election consideration and subject to proration under the terms of the merger agreement; |
• | “Code” refers to the Internal Revenue Code of 1986, as amended; |
• | “combined company” refers to Bioventus immediately following the completion of the merger and the other transactions contemplated by the merger agreement; |
• | “DGCL” refers to the General Corporation Law of the State of Delaware; |
• | “DLLCA” refers to the Limited Liability Company Act of the State of Delaware; |
• | “effective time” refers to the date and time when the first merger becomes effective under the DGCL, which will be the date and time at which the certificate of merger with respect to the first merger is filed with the Secretary of State of the State of Delaware, or such later date and time as may be mutually agreed to in writing by Bioventus and Misonix and specified in such certificate of merger; |
• | “end date” refers to January 31, 2022, the date on which, subject to certain limitations in the merger agreement, the merger agreement may be terminated and the merger abandoned by either Bioventus or Misonix (which date will be automatically extended in certain circumstances related to the receipt of required regulatory approvals or the absence of restraints under certain competition laws to March 31, 2022, pursuant to the terms of the merger agreement); |
• | “Exchange Act” refers to the Securities Exchange Act of 1934, as amended; |
• | “first merger” refers to the merger of Merger Sub I with and into Misonix; |
• | “former LLC owners” refers to certain members of BV LLC; |
• | “GAAP” refers to U.S. generally accepted accounting principles; |
• | “HSR Act” refers to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; |
• | “J.P Morgan” refers to J.P. Morgan Securities LLC, financial advisor to Misonix in connection with the proposed mergers; |
• | “LLC interests” refers to single class of common membership interests in BV LLC; |
• | “mergers” refers to the first merger and the second merger; |
• | “merger agreement” refers to the Agreement and Plan of Merger, dated July 29, 2021, as it may be amended from time to time, by and among Bioventus, Merger Sub I, Merger Sub II and Misonix; |
• | “merger consideration” refers to the aggregate cash election consideration and stock election consideration; |
• | “Merger Sub I” refers to Oyster Merger Sub I, Inc., a Delaware corporation and wholly owned subsidiary of Bioventus, formed for the purpose of effecting the first merger as described in this joint proxy statement/prospectus; |
• | “Merger Sub II” refers to Oyster Merger Sub II, LLC, a Delaware limited liability company and wholly owned subsidiary of Bioventus, formed for the purpose of effecting the second merger as described in this joint proxy statement/prospectus; |
• | “Misonix” refers to Misonix, Inc., a Delaware corporation; |
• | “Misonix adjournment proposal” refers to the proposal to approve the adjournment of the Misonix special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes |
at the time of the Misonix special meeting to approve the Misonix merger proposal or to ensure that any supplement or amendment to the accompanying joint proxy statement/prospectus is timely provided to Misonix stockholders; |
• | “Misonix board” refers to the board of directors of Misonix; |
• | “Misonix common stock” refers to the common stock, par value $0.0001 per share, of Misonix; |
• | “Misonix compensation proposal” refers to the proposal to approve, on a non-binding advisory basis, the compensation that may be paid or become payable to Misonix named executive officers that is based on or otherwise relates to the transactions contemplated by the merger agreement; |
• | “Misonix merger proposal” refers to the proposal to adopt the merger agreement; |
• | “Misonix record date” refers to [●], 2021; |
• | “Misonix special meeting” refers to the special meeting of Misonix stockholders to consider and vote upon the Misonix merger proposal and related matters; |
• | “Nasdaq” refers to the Nasdaq Global Select Market; |
• | “original LLC owners” refers to the holders of BV LLC membership interests prior to the execution of the Bioventus LLC agreement; |
• | “Perella Weinberg” refers to Perella Weinberg Partners L.P., financial advisor to Bioventus in connection with the proposed mergers; |
• | “SEC” refers to the U.S. Securities and Exchange Commission; |
• | “second effective time” refers to the date and time when the second merger becomes effective under the DGCL, which will be the date and time at which the certificate of merger with respect to the second merger is filed with the Secretary of State of the State of Delaware, or such later date and time as may be mutually agreed to in writing by Bioventus and Misonix and specified in such certificate of merger; |
• | “second merger” refers to the merger of Misonix with and into Merger Sub II; |
• | “Securities Act” refers to the Securities Act of 1933, as amended; |
• | “share issuance” refers to the issuance of shares of Bioventus class A common stock to Misonix stockholders in connection with the merger; |
• | “stock election consideration” refers to 1.6839 validly issued, fully paid and non-assessable shares of Bioventus class A common stock, which figure reflects the number of shares of Bioventus class A common stock that Misonix stockholders will be entitled to receive in the first merger for each share of Misonix common stock held immediately prior to the effective time if such stockholder elects the stock election consideration; |
• | “stockholders agreement” refers to Stockholders Agreement, dated February 16, 2021, by and among Bioventus Inc., Bioventus LLC and the principal stockholders named therein; |
• | “TRA” refers to the Tax Receivable Agreement, dated as of February 16, 2021, by and among Bioventus Inc., Bioventus LLC and the continuing LLC owner; and |
• | “transaction” refers to the transactions contemplated by the merger agreement including the mergers. |
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• | Bioventus stockholders must approve the Bioventus share issuance proposal; and |
• | Misonix stockholders must approve the Misonix merger proposal. |
• | Bioventus Share Issuance Proposal. AGAINST |
• | Bioventus Adjournment Proposal. |
Bioventus adjournment proposal. An abstention or other failure of any shares of Bioventus common stock virtually present or represented by proxy and entitled to vote at the Bioventus special meeting on the Bioventus adjournment proposal to vote on the Bioventus adjournment proposal, will have the same effect as a vote “ AGAINST |
• | Misonix merger proposal AGAINST |
• | Misonix compensation proposal non-votes are counted only for purposes of determining whether a quorum is present at the meeting and therefore will have no effect on the outcome of the vote for the Misonix compensation proposal. Approval of the Misonix compensation proposal is not a condition to completion of the mergers, and the vote with respect to this proposal is advisory only and will not be binding on Misonix, the surviving corporation, the surviving company or Bioventus. If the mergers are completed, the transactions-related executive compensation may be paid to Misonix’s named executive officers to the extent payable in accordance with the terms of the compensation arrangements even if Misonix stockholders fail to approve, by non-binding, advisory vote, the Misonix compensation proposal. |
• | Misonix adjournment proposal. |
meeting on the Misonix adjournment proposal to vote on the Misonix adjournment proposal, will have the same effect as a vote “ AGAINST |
• | subsequently submitting a new proxy (including over the internet or telephone) for the applicable special meeting that is received by the deadline specified on the accompanying proxy card; |
• | giving timely written notice of your revocation to Bioventus’ or Misonix’s Corporate Secretary, as applicable; or |
• | attending and voting at the applicable special meeting. |
If you are an Bioventus stockholder: |
If you are a Misonix stockholder: | |
Bioventus Inc. 4721 Emperor Boulevard, Suite 400 Durham, North Carolina 27703 Attention: Corporate Secretary tony.dadamio@bioventus.com (919) 474-6700 Bioventus Inc. |
Misonix, Inc. 1938 New Highway Farmingdale, NY 11735 Attention: Secretary misonixproxy@misonix.com (631) 694-9555 Misonix, Inc. |
• | a statement reflecting the number of whole shares of Bioventus class A common stock, if any, that such holder is entitled to receive in non-certificated book-entry form in the name of such record holder; and |
• | a check, or wire transfer of immediately available funds (provided that such holder has provided wire transfer instructions and is entitled to cash in excess of $250,000), in the amount (after giving effect to any required tax withholdings as provided in the merger agreement) of (a) any applicable cash election consideration, (b) any cash in lieu of fractional shares of Bioventus class A common stock plus (c) any unpaid cash dividends and any other dividends or other distributions that such holder has the right to receive pursuant to the merger agreement. |
• | the applicable stock election consideration, if any, that such holder is entitled to receive in non-certificated book-entry form in the name of such record holder; and |
• | a check, or wire transfer of immediately available funds (provided that such holder has provided wire transfer instructions and is entitled to cash in excess of $250,000), in the amount (after giving effect to any required tax withholdings as provided in the merger agreement) of (a) any applicable cash election consideration, (b) any cash in lieu of fractional shares of Bioventus class A common stock plus (c) any unpaid cash dividends and any other dividends or distributions that such holder has the right to receive pursuant to the merger agreement. The exchange agent will promptly cancel each such non-DTC book-entry share. |
• | the applicable stock election consideration, if any, that such holder is entitled to receive in non-certificated book-entry form in the name of such record holder; and |
• | a check, or wire transfer of immediately available funds (provided that such holder has provided wire transfer instructions and is entitled to cash in excess of $250,000), in the amount (after giving effect to any required tax withholdings as provided in the merger agreement) of (a) any applicable cash election consideration, (b) any cash in lieu of fractional shares of Bioventus Class A Common Stock plus (c) any unpaid cash dividends and any other dividends or distributions that such holder has the right to receive pursuant to the merger agreement. The exchange agent will promptly cancel each such DTC book-entry share. |
If you are an Bioventus stockholder: Bioventus Inc., Attn: Corporate Secretary 4721 Emperor Boulevard, Suite 100, Durham, North Carolina 27703 tony.dadamio@bioventus.com (919) 474-6700 |
If you are a Misonix stockholder: Misonix, Inc. Attention: Secretary 1938 New Highway Farmingdale, NY 11735 misonixproxy@misonix.com (631) 694-9555 |
• | all stock election shares and all no election shares will be exchanged for 1.6839 shares of Bioventus class A common stock; and |
• | a portion of the cash election shares of each Misonix stockholder will be exchanged for $28.00 in cash as follows: cash election shares exchanged for $28.00 in cash = |
• | all cash election shares will be exchanged for the cash consideration; and |
• | all stock election shares and no election shares will be treated in the following manner: |
• | if the shortfall amount is less than or equal to the product of the aggregate number of no election shares and $28.00, which we refer to as the “no election value”, then (1) all stock election shares will be exchanged for 1.6839 shares of Bioventus class A common stock, and (2) a portion of the |
no election shares of each Misonix stockholder, calculated as follows, will be exchanged for $28.00 in cash as follows (and the remaining portion of such stockholder’s no election shares, if any, will be exchanged for 1.6839 shares of Bioventus class A common stock): |
• | if the shortfall amount is more than the no election value, then (1) all no election shares will be exchanged for $28.00 in cash and (2) a portion of the stock election shares of each stockholder will be exchanged for $28.00 in cash as follows (and the remaining portion of such stockholder’s stock election shares will be exchanged for 1.6839 shares of Bioventus class A common stock): |
• | Bioventus Proposal 1 : Approval of the Share Issuance. |
• | Bioventus Proposal 2 : Adjournment of the Bioventus Special Meeting. |
• | Misonix Proposal 1 : Adoption of the Merger Agreement. |
• | Misonix Proposal 2 Approval, on an Advisory Non-Binding Basis, of Certain Merger-Related Compensatory Arrangements with Misonix’s Named Executive Officers. |
• | Misonix Proposal 3 Adjournment of the Misonix Special Meeting. |
• | the registration statement on Form S-4 of which this joint proxy statement/prospectus forms a part must have become effective in accordance with the provisions of the Securities Act, no stop order may have been issued by the SEC and remain in effect with respect to the Form S-4 and no proceedings for that purpose may have been commenced or threatened in writing by the SEC and not withdrawn; |
• | approval by Misonix stockholders of the Misonix merger proposal must have been obtained; |
• | approval by Bioventus stockholders of the Bioventus share issuance proposal must have been obtained; |
• | any waiting period (or any agreed upon extension of any waiting period or commitment not to consummate the mergers for any period of time) applicable to the consummation of the mergers under the HSR Act must have expired or been terminated by the relevant governmental entity, and there must be no pending agreement between Bioventus and any governmental entity not to close; |
• | the shares of Bioventus class A common stock to be issued pursuant to the first merger, including the shares of Bioventus class A common stock to be issued upon the exercise of converted Misonix stock |
options and upon vesting of converted Misonix RSUs, must have been approved for listing (subject to notice of issuance) on Nasdaq; and |
• | no law or order preventing, enjoining or making illegal the consummation of the mergers may have been entered, issued or adopted by any court of competent jurisdiction or other governmental entity of competent jurisdiction and remain in effect. |
• | by mutual written consent of Bioventus and Misonix at any time prior to the effective time; |
• | by either Bioventus or Misonix, if the merger has not been consummated at or prior to the end date, provided, that the end date will be automatically extended in the event the only closing condition not satisfied or waived is the condition related to antitrust laws (however, a party may not terminate the merger agreement if such party’s material breach of any of its obligations under the merger agreement materially contributed to the failure of the closing to have occurred by the end date); |
• | by either Bioventus or Misonix at any time prior to the effective time if a relevant legal restraint permanently preventing, enjoining or making illegal the consummation of the mergers shall have |
become final and non-appealable; provided, that the party seeking to terminate the merger agreement must have used reasonable best efforts to prevent the entry of and to remove such relevant legal restraint in accordance with the merger agreement; |
• | by Bioventus at any time prior to Misonix obtaining its required stockholder approval, if the Misonix board has made a change in recommendation or Misonix has willfully breached in any material respect the covenants applicable to it regarding non-solicitation, special meetings and changes in recommendation; |
• | by Misonix at any time prior to Bioventus obtaining its required stockholder approval, if (a) the Bioventus board has made a change in recommendation, (b) Bioventus has willfully breached in any material respect the covenants applicable to it regarding non-solicitation, special meetings and changes in recommendation or (c) if Bioventus has materially breached its representations and warranties regarding financing and solvency under the merger agreement or its covenants regarding financing and financing cooperation under the merger agreement, and (i) any such breach is not cured by the earlier of the end date or prior to the twentieth business day after Misonix gives written notice of such breach to Bioventus, (ii) all of the conditions, the satisfaction or waiver of which would be necessary to trigger the obligation of Bioventus to consummate the mergers (not including the condition related to the certificate to be provided by Misonix), have been satisfied and continue to be satisfied (other than those conditions that by their nature cannot be satisfied other than at the closing), (iii) Misonix has committed to Bioventus that Misonix is ready, willing and able to consummate the transactions contemplated by the merger agreement, and (iv) Bioventus, Merger Sub I or Merger Sub II fails to consummate the transactions contemplated by the merger agreement by the earlier of the end date or within two business days following the written notice delivered by Misonix to Bioventus following the expiration of the cure period specified above; |
• | by Misonix, if prior to obtaining its required stockholder approval, (a) the Misonix board has authorized Misonix to enter into a definitive agreement relating to a superior proposal in material compliance with the merger agreement and (b) substantially concurrently with the termination of the merger agreement, Misonix enters into the definitive agreement relating to a superior proposal and pays Bioventus the applicable termination fee pursuant to the merger agreement; |
• | by either Bioventus or Misonix, if the approval by Misonix stockholders of the Misonix merger proposal has not been obtained after a vote on approval of such proposal has been taken at the Misonix special meeting (including any postponement or adjournment thereof); |
• | by either Bioventus or Misonix, if the approval by Bioventus stockholders of the Bioventus share issuance proposal has not been obtained after a vote on approval of such proposal has been taken at the Bioventus special meeting (including any postponement or adjournment thereof); |
• | by Bioventus (a) if any of Misonix’s representations and warranties contained in the merger agreement are inaccurate such that the conditions to closing would not be satisfied or (b) if Misonix has breached any covenant in the merger agreement and such breach would result in the failure of a condition to closing, provided, that if an inaccuracy in any of Misonix’s representations and warranties or a breach of a covenant of Misonix is curable by Misonix by the end date and Misonix is continuing to exercise its reasonable best efforts to cure such inaccuracy or breach, then Bioventus may not terminate the merger agreement under this paragraph on account of such inaccuracy or breach unless such inaccuracy or breach shall remain uncured for a period of thirty business days commencing on the date that Misonix receives written notice of such inaccuracy or breach from Bioventus; provided, further, that Bioventus shall not have the right to terminate the merger agreement pursuant to this paragraph if Bioventus is then in breach of any of its representations, warranties or agreements contained in the merger agreement, which breach would give rise to the failure of a condition to closing; or |
• | by Misonix if: (a) any of Bioventus’, Merger Sub I’s or Merger Sub II’s representations and warranties contained in the merger agreement are inaccurate such that the conditions to closing would not be satisfied; or (b) any of Bioventus’ covenants contained in the merger agreement will have been breached such that the conditions to closing would not be satisfied; provided, however, that for purposes of clauses (a) and (b) above, if an inaccuracy in any of Bioventus’, Merger Sub I’s or Merger Sub II’s representations and warranties or a breach of a covenant of Bioventus is curable by Bioventus by the end date and Bioventus is continuing to exercise its reasonable best efforts to cure such inaccuracy or breach, then Misonix may not terminate the merger agreement under this paragraph on account of such inaccuracy or breach unless such inaccuracy or breach shall remain uncured for a period of thirty business days commencing on the date that Bioventus receives written notice of such inaccuracy or breach from Misonix; provided, further, that Misonix shall not have the right to terminate the merger agreement pursuant to this paragraph if Misonix is then in breach of any of its representations, warranties or agreements contained in the merger agreement, which breach would give rise to the failure of a condition to closing. |
• | the occurrence of any change, event, series of events or circumstances that could give rise to the termination of the merger agreement, including a termination of the merger agreement under circumstances that could require Bioventus to pay a termination fee to Misonix or require Misonix to pay a termination fee to Bioventus; |
• | uncertainties related to the timing of the receipt of required regulatory approvals for the merger and the possibility that Bioventus and Misonix may be required to accept conditions that could reduce or eliminate the anticipated benefits of the merger as a condition to obtaining regulatory approvals or that the required regulatory approvals might not be obtained at all; |
• | the price of Bioventus and Misonix common stock could change before the completion of the merger, including as a result of uncertainty as to the long-term value of the common stock of the combined company or as a result of broader stock market movements; |
• | the possibility that the parties are unable to complete the merger due to the failure of Bioventus stockholders to approve the share issuance or of Misonix stockholders to adopt the merger agreement, or the failure to satisfy any of the other conditions to the completion of the merger, or unexpected delays in satisfying any conditions; |
• | delays in closing, or the failure to close, the merger for any reason, could negatively impact Bioventus, Misonix or the combined company; |
• | risks that the pendency or completion of the merger and the other transactions contemplated by the merger agreement disrupt current plans and operations, which may adversely impact Bioventus’s or Misonix’s respective businesses; |
• | difficulties or delays in integrating the businesses of Bioventus and Misonix following completion of the merger or fully realizing the anticipated synergies or other benefits expected from the merger; |
• | certain restrictions during the pendency of the proposed merger that may impact the ability of Bioventus or Misonix to pursue certain business opportunities or strategic transactions; |
• | the risk of legal proceedings that have been or may be instituted against Bioventus, Misonix, their directors and/or others relating to the merger; |
• | risks related to the diversion of the attention and time of Bioventus or Misonix management from ongoing business concerns; |
• | the risk that the proposed merger or any announcement relating to the proposed merger could have an adverse effect on the ability of Bioventus or Misonix to retain and hire key personnel or maintain relationships with customers, suppliers, distributors, vendors, strategic partners or other third parties, including regulators and other governmental authorities or agencies, or on Bioventus’s or Misonix’s respective operating results and businesses generally; |
• | the potentially significant amount of any costs, fees, expenses, impairments or charges related to the merger; |
• | the potential dilution of Bioventus and Misonix stockholders’ ownership percentage of the combined company as compared to their ownership percentage of Bioventus or Misonix, as applicable, prior to the merger; |
• | the business, economic, political and other conditions in the countries in which Bioventus or Misonix operate; |
• | events beyond the control of Bioventus and Misonix, such as acts of terrorism or the continuation or worsening of the COVID-19 pandemic and changes in applicable law, including changes in Bioventus’s or Misonix’s estimates of their expected tax rate based on current tax law; |
• | the potential dilution of the combined company’s earnings per share as a result of the merger; |
• | Bioventus and Misonix directors and executive officers having interests in the merger that are different from, or in addition to, the interests of Bioventus and Misonix stockholders generally; and |
• | the possibility that the combined company’s results of operations, cash flows and financial position after the merger may differ materially from the unaudited pro forma condensed combined financial information contained in this proxy statement/prospectus. |
• | Because the exchange ratio is fixed and will not be adjusted in the event of any change in the price of either Bioventus or Misonix common stock, the value of the consideration that Misonix stockholders will receive in the first merger is uncertain. |
• | The market price of Bioventus common stock will continue to fluctuate after the mergers. |
• | The mergers may not be completed and the merger agreement may be terminated in accordance with its terms. |
• | The termination of the merger agreement could negatively impact Bioventus or Misonix and the trading prices of the Bioventus or Misonix common stock. |
• | Combining the businesses of Bioventus and Misonix may be more difficult, costly or time-consuming than expected and the combined company may fail to realize the anticipated benefits of the merger, which may adversely affect the combined company’s business results and negatively affect the value of the combined company’s common stock. |
• | The failure to successfully integrate the businesses and operations of Bioventus and Misonix in the expected time frame may adversely affect the combined company’s future results. |
• | The combined company may not be able to retain customers, suppliers or distributors, or customers, suppliers or distributors may seek to modify contractual relationships with the combined company, which could have an adverse effect on the combined company’s business and operations. Third parties may terminate or alter existing contracts or relationships with Bioventus or Misonix. |
• | The combined company may be exposed to increased litigation, which could have an adverse effect on the combined company’s business and operations. |
• | The Bioventus and Misonix unaudited prospective financial information is inherently subject to uncertainties, the unaudited pro forma condensed combined financial information included in this document is preliminary and the combined company’s actual financial position and results of operations after the transaction may differ materially from these estimates and the unaudited pro forma condensed combined financial information included in this joint proxy statement/prospectus. The unaudited pro forma condensed combined financial information does not reflect the effect of any divestitures that may be required in connection with the transaction. |
• | Bioventus’ business may continue to experience adverse impacts as a result of the COVID-19 pandemic. |
• | Bioventus is highly dependent on a limited number of products. |
• | Bioventus’ long-term growth depends on its ability to develop, acquire and commercialize new products, line extensions or expanded indications. |
• | Bioventus may be unable to successfully commercialize newly developed or acquired products or therapies in the United States. |
• | Bioventus’ products and operations are subject to extensive governmental regulation, and its failure to comply with applicable requirements could cause its business to suffer. |
• | Bioventus may be subject to enforcement action if it engages in improper claims submission practices and resulting audits or denials of Bioventus’ claims by government agencies could reduce Bioventus’ net sales or profits. |
• | The FDA regulatory process is expensive, time-consuming and uncertain, and the failure to obtain and maintain required regulatory clearances and approvals could prevent Bioventus from commercializing its products. |
• | Protection of Bioventus’ intellectual property rights may be difficult and costly, and Bioventus’ inability to protect its intellectual property could adversely affect its competitive position. |
• | Bioventus depends on certain technologies that are licensed to it. Bioventus does not control the intellectual property rights covering these technologies and any loss of Bioventus’ rights to these technologies or the rights licensed to Bioventus could prevent Bioventus from selling Bioventus’ products, which could adversely impact its business, results of operations and financial condition. |
• | In the past, Bioventus identified material weaknesses in its internal control over financial reporting. If Bioventus experiences additional material weaknesses in the future or otherwise fails to maintain an effective system of internal controls, Bioventus may not be able to accurately or timely requirements applicable to public companies, which may adversely affect investor confidence in Bioventus, and, as a result, the market price of Bioventus class A common stock. |
• | Bioventus is a “controlled company” within the meaning of Nasdaq listing standards and, as a result, will qualify for, and intend to rely on, exemptions from certain corporate governance requirements. You will not have the same protections afforded to stockholders of companies that are subject to such requirements. |
• | Bioventus’ principal asset is Bioventus’ interest in BV LLC, and, accordingly, Bioventus depends on distributions from BV LLC to pay Bioventus’ taxes and expenses, including payments under the Tax Receivable Agreement. BV LLC’s ability to make such distributions may be subject to various limitations and restrictions. |
• | The TRA with Smith & Nephew, Inc. (“the continuing LLC owner”) requires Bioventus to make cash payments to it in respect of certain tax benefits to which Bioventus is or may become entitled, and Bioventus expects that the payments it will be required to make could be significant. |
• | Taking advantage of the reduced disclosure requirements applicable to “emerging growth companies” may make Bioventus class A common stock less attractive to investors. |
• | each company may experience negative reactions from the financial markets, including negative impacts on its stock price; |
• | each company may experience negative reactions from its customers, suppliers, distributors and employees; |
• | each company will be required to pay its respective costs relating to the mergers, such as financial advisory, legal, financing and accounting costs and associated fees and expenses, whether or not the mergers are completed; |
• | the merger agreement places certain restrictions on the conduct of each company’s business prior to completion of the mergers and such restrictions, the waiver of which is subject to the consent of the other company (not to be unreasonably withheld, conditioned or delayed), which may have prevented Bioventus and Misonix from taking actions during the pendency of the mergers that would have been beneficial (see “The Merger Agreement—Conduct of Business Prior to Completion of the Mergers” for a description of the restrictive covenants applicable to Bioventus and Misonix); and |
• | matters relating to the mergers (including integration planning) will require substantial commitments of time and resources by Bioventus and Misonix management, which could otherwise have been devoted to day-to-day |
• | solicit, initiate, knowingly encourage, knowingly induce, knowingly assist, or knowingly facilitate any inquiries regarding, or the submission or announcement by any person of, any proposal or offer that constitutes, or would reasonably be expected to lead to, an acquisition proposal; |
• | furnish any information regarding Bioventus, Misonix or their respective subsidiaries in connection with, for the purpose of soliciting, initiating, encouraging or facilitating, or in response to, an acquisition proposal; |
• | engage in or otherwise participate in any discussions or negotiations with any person with respect to any acquisition proposal or any inquiry, proposal or offer that would reasonably be expected to lead to an acquisition proposal; or |
• | approve, adopt, recommend, agree to, or enter into, or propose to approve, adopt, recommend, agree to, or enter into, any letter of intent or similar document, agreement, commitment, or agreement in principle with respect to any acquisition proposal. |
• | combining the companies’ operations and corporate functions; |
• | combining the businesses of Bioventus and Misonix and meeting the capital requirements of the combined company, in a manner that permits the combined company to achieve any cost savings or other synergies anticipated to result from the mergers, the failure of which would result in the anticipated benefits of the transaction not being realized in the time frame currently anticipated or at all; |
• | integrating personnel from the two companies, especially in the COVID-19 environment which has required many employees to work remotely; |
• | integrating the companies’ technologies and technologies licensed from third parties; |
• | integrating and unifying the offerings and services available to customers; |
• | identifying and eliminating redundant and underperforming functions and assets; |
• | harmonizing the companies’ operating practices, employee development and compensation programs, internal controls and other policies, procedures and processes; |
• | maintaining existing agreements with customers, suppliers, distributors and vendors, avoiding delays in entering into new agreements with prospective customers, suppliers, distributors and vendors, and leveraging relationships with such third parties for the benefit of the combined company; |
• | addressing possible differences in business backgrounds, corporate cultures and management philosophies; |
• | consolidating the companies’ administrative and information technology infrastructure; |
• | coordinating distribution and marketing efforts; |
• | managing the movement of certain positions to different locations; |
• | coordinating geographically dispersed organizations; and |
• | effecting actions that may be required in connection with obtaining regulatory or other governmental approvals. |
• | increasing its vulnerability to changing economic, regulatory and industry conditions; |
• | limiting its ability to compete and its flexibility in planning for, or reacting to, changes in its business and the industry; |
• | limiting its ability to pay dividends to its stockholders; |
• | limiting its ability to borrow additional funds; and |
• | increasing its interest expense and requiring it to dedicate a substantial portion of its cash flow from operations to payments on its debt, thereby reducing funds available for working capital, capital expenditures, acquisitions, and share repurchases, dividends and other purposes. |
• | the combined company may not have enough cash to pay such dividends or to repurchase shares due to its cash requirements, capital spending plans, cash flow or financial position; |
• | decisions on whether, when and in which amounts to make any future distributions will remain at all times entirely at the discretion of the Bioventus board, which could change its dividend practices at any time and for any reason; |
• | the combined company’s desire to maintain or improve the credit ratings on its debt; |
• | the amount of dividends that the combined company may distribute to its stockholders is subject to restrictions under Delaware law and is limited by restricted payment and leverage covenants in the |
combined company’s credit facilities and indentures and, potentially, the terms of any future indebtedness that the combined company may incur; and |
• | certain limitations on the amount of dividends subsidiaries of the combined company can distribute to the combined company, as imposed by state law, regulators or agreements. |
• | properly identify and anticipate the needs of healthcare professionals and patients; |
• | develop and introduce new products, line extensions and expanded indications in a timely manner; |
• | distinguish Bioventus’ products from those of its competitors; |
• | avoid infringing upon the intellectual property rights of third-parties and maintain necessary intellectual property licenses from third-parties; |
• | demonstrate, if required, the safety and efficacy of new products with data from preclinical studies and clinical trials; |
• | obtain clearance or approval, if required, from the FDA and other regulatory agencies, for such new products, line extensions and expanded indications, and maintain full compliance with FDA and other regulatory requirements applicable to new devices or products or modifications of existing devices or products; |
• | provide adequate training to potential users of Bioventus’ products; |
• | receive adequate coverage and reimbursement for Bioventus’ products; and |
• | maintain an effective and dedicated sales and marketing team. |
• | the perceived advantages and disadvantages of such products over existing therapies and other competitive treatments; |
• | availability of alternative treatments; |
• | inability to secure and maintain adequate coverage, including obtaining a unique reimbursement code; |
• | the extent to which physicians prescribe the Company’s products; |
• | the willingness of the target patient population to try new therapies; |
• | the strength of marketing and distribution support of the Company’s new products and competitive products; |
• | publicity concerning the Company’s new products, Bioventus’ existing products or competing products and treatments; |
• | pricing and cost effectiveness of such new therapies; |
• | the effectiveness of Bioventus’ sales and marketing strategies; and |
• | the willingness of patients to pay out-of-pocket |
• | risks associated with conducting due diligence; |
• | problems integrating the purchased technologies, products or business operations; |
• | inability to achieve the anticipated synergies and overpaying for acquisitions or unanticipated costs associated with acquisitions; |
• | invalid net sales assumptions for potential acquisitions; |
• | issues maintaining uniform standards, procedures, controls and policies; |
• | diversion of management’s attention from Bioventus’ core business; |
• | adverse effects on existing business relationships with suppliers, distributors and customers; |
• | risks associated with entering new markets in which Bioventus has limited or no experience; |
• | potential loss of key employees of acquired businesses; and |
• | increased legal, accounting and compliance costs. |
• | greater financial, human and other resources for product research and development, sales and marketing and litigation; |
• | significantly greater name recognition; |
• | control of intellectual property and more expansive portfolios of intellectual property rights, which could impact future products under development; |
• | greater experience in obtaining and maintaining regulatory clearances or approvals for products and product enhancements; |
• | established relationships with hospitals and other healthcare providers, physicians, suppliers, customers and third-party payers; |
• | additional lines of products, and the ability to bundle products to offer greater incentives to gain a competitive advantage; and |
• | more established sales, marketing and worldwide distribution networks. |
• | costs of litigation; |
• | distraction of management’s attention from Bioventus’ primary business; |
• | the inability to commercialize existing or new products; |
• | decreased demand for Bioventus’ products or, if cleared or approved, products in development; |
• | damage to Bioventus’ business reputation; |
• | product recalls or withdrawals from the market; |
• | withdrawal of clinical trial participants; |
• | substantial monetary awards to patients or other claimants; and |
• | loss of net sales. |
• | economic weakness, including inflation, or political instability in particular foreign economies and markets; |
• | foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country; |
• | customers in some foreign countries potentially having longer payment cycles; |
• | disadvantages of competing against companies from countries that are not subject to U.S. laws and regulations, including the U.S. Foreign Corrupt Practices Act (FCPA), regulations of the U.S. Office of Foreign Assets Controls, and U.S. anti-money laundering regulations, as well as exposure of Bioventus’ foreign operations to liability under these regulatory regimes; |
• | training of third-parties on Bioventus’ products and the procedures in which they are used; |
• | reduced protection for and greater difficulty enforcing Bioventus’ intellectual property rights; |
• | unexpected changes in tariffs, trade barriers and regulatory requirements, export licensing requirements or other restrictive actions by foreign governments; |
• | difficulty in staffing and managing widespread operations, including compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; |
• | foreign taxes, including withholding of payroll taxes; |
• | workforce uncertainty in countries where labor unrest is more common than in the United States; |
• | international regulators and third-party payers requiring additional clinical studies prior to approving or allowing reimbursement for Bioventus’ products; |
• | complexities associated with managing multiple payer reimbursement regimes, government payers or patient self-pay systems; |
• | production shortages resulting from any events affecting material supply or manufacturing capabilities abroad; and |
• | business interruptions resulting from geopolitical actions, including war and terrorism, global pandemics or natural disasters including earthquakes, typhoons, floods and fires. |
• | a minimum interest coverage ratio and a maximum debt leverage ratio requirement as defined in Bioventus’ credit agreement; |
• | restrictions on the declaration or payment of certain distributions on or in respect of Bioventus’ equity interests; |
• | restrictions on acquisitions, investments and certain other payments; |
• | limitations on the incurrence of new indebtedness; |
• | limitations on the incurrence of new liens on property or assets; |
• | limitations on transfers, sales and other dispositions; |
• | limitations on entering into transactions with affiliates; and |
• | limitations on making any material change in any of Bioventus’ business objectives that could reasonably be expected to have a material adverse effect on the repayment of Bioventus’ credit agreement. |
• | requiring a substantial portion of Bioventus’ cash flows to be dedicated to debt service payments instead of funding growth, working capital, capital expenditures, investments or other cash requirements; |
• | reducing Bioventus’ flexibility to adjust to changing business conditions or obtain additional financing; |
• | exposing Bioventus to the risk of increased interest rates as certain of Bioventus’ borrowings, including borrowings under Bioventus’ term loan, are at variable rates, making it more difficult for Bioventus to make payments on Bioventus’ indebtedness; |
• | restricting Bioventus from making strategic acquisitions or causing Bioventus to make non-strategic divestitures; |
• | subjecting Bioventus to restrictive covenants that may limit Bioventus’ flexibility in operating Bioventus’ business; and |
• | limiting Bioventus’ ability to obtain additional financing for working capital, capital expenditures, debt service requirements and general corporate or other purposes. |
• | design, development and manufacturing; |
• | testing, labeling, content and language of instructions for use and storage; |
• | clinical trials; |
• | product safety; |
• | marketing, sales and distribution; |
• | premarket clearance and approval; |
• | conformity assessment procedures; |
• | record-keeping procedures; |
• | advertising and promotion; |
• | recalls and other field safety corrective actions; |
• | postmarket surveillance, including reporting of deaths or serious injuries and malfunctions that, if they were to recur, could lead to death or serious injury; |
• | postmarket studies; and |
• | product import and export. |
• | administrative or judicially imposed sanctions; |
• | unanticipated expenditures to address or defend such actions; |
• | injunctions, consent decrees or the imposition of civil penalties or fines; |
• | recall or seizure of Bioventus’ products; |
• | total or partial suspension of production or distribution; |
• | refusal to grant pending or future clearances or approvals for Bioventus’ products; |
• | withdrawal or suspension of regulatory clearances or approvals; |
• | clinical holds; |
• | untitled letters or warning letters; |
• | refusal to permit the import or export of Bioventus’ products; and |
• | criminal prosecution of Bioventus or Bioventus’ employees. |
• | Bioventus may not be able to demonstrate to the FDA’s satisfaction that the product or modification is substantially equivalent to the proposed predicate device or safe and effective for its intended use; |
• | the data from Bioventus’ preclinical studies and clinical trials may be insufficient to support clearance or approval, where required; and |
• | the manufacturing process or facilities Bioventus uses may not meet applicable requirements. |
• | adverse publicity, warning letters, untitled letters, fines, injunctions, consent decrees and civil penalties; |
• | repair, replacement, refunds, recalls, termination of distribution, administrative detention or seizures of Bioventus’ products; |
• | operating restrictions, partial suspension or total shutdown of production; |
• | customer notifications or repair, replacement or refunds; |
• | refusing Bioventus’ requests for 510(k) clearance or PMA approvals or foreign regulatory approvals of new products, new intended uses or modifications to existing products; |
• | withdrawals of current 510(k) clearances or PMAs or foreign regulatory approvals, resulting in prohibitions on sales of Bioventus’ products; |
• | FDA refusal to issue certificates to foreign governments needed to export products for sale in other countries; and |
• | criminal prosecution. |
• | administrative or judicially imposed sanctions; |
• | injunctions or the imposition of civil penalties or fines; |
• | recall or seizure of Bioventus’ products; |
• | total or partial suspension of production or distribution; |
• | refusal to grant pending or future clearances or approvals for Bioventus’ products; |
• | withdrawal or suspension of regulatory clearances or approvals; |
• | clinical holds; |
• | untitled letters or warning letters; |
• | refusal to permit the import or export of Bioventus’ products; and |
• | criminal prosecution of Bioventus or Bioventus’ employees. |
• | increased the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program; |
• | created a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected; |
• | extended manufacturers’ Medicaid rebate liability to individuals enrolled in Medicaid managed care organizations; |
• | expanded eligibility criteria for Medicaid programs; |
• | established a new Patient-Centered Outcomes Research Institute to oversee and identify priorities in comparative clinical effectiveness research in an effort to coordinate and develop such research; and |
• | implemented payment system reforms including a national pilot program on payment bundling to encourage hospitals, physicians and other providers to improve the coordination, quality and efficiency of certain healthcare services through bundled payment models. |
• | the federal Anti-Kickback Statute, which applies to Bioventus’ marketing practices, educational programs, pricing and discounting policies and relationships with healthcare providers, by prohibiting, among other things, persons and entities from knowingly and willfully soliciting, receiving, offering or providing remuneration intended to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of an item or service reimbursable under a federal healthcare program, such as the Medicare or Medicaid programs. A person or entity does not need to have actual knowledge of this statute or specific intent to violate it to have committed a violation. Violations are also subject to civil monetary penalties up to $100,000 for each violation, plus up to three times the remuneration involved. Civil penalties for such conduct can further be assessed under the federal False Claims Act. Violations of the federal Anti-Kickback Statute may also result civil and criminal penalties, including criminal fines of up to $100,000 and imprisonment of up to ten years, or exclusion from Medicare, Medicaid or other governmental programs; |
• | the “Stark Law,” which prohibits a physician from referring Medicare or Medicaid patients to an entity providing “designated health services,” which includes durable medical equipment, if the physician or immediate family member of the physician, has an ownership or investment interest in or compensation arrangement with such entity that does not comply with the requirements of a Stark exception; |
• | the federal civil and criminal false claims laws, including the False Claims Act, which impose civil and criminal penalties through governmental, civil whistleblower or qui tam actions, against individuals or entities for, among other things, knowingly presenting, or causing to be presented, claims for payment or approval to the federal government that are false or fraudulent, knowingly making a false statement material to an obligation to pay or transmit money or property to the federal government or knowingly concealing or knowingly and improperly avoiding or decreasing an obligation to pay or transmit money or property to the federal government. Suits filed under the False Claims Act, can be brought by any individual on behalf of the government, known as ‘‘qui tam’’ actions, and such individuals, commonly |
known as ‘‘whistleblowers,’’ may share in any amounts paid by the entity to the government in fines or settlement. The frequency of filing qui tam actions has increased significantly in recent years, causing greater numbers of pharmaceutical, medical device and other healthcare companies to have to defend a False Claims Act action. When an entity is determined to have violated the False Claims Act, the government may impose civil fines and penalties ranging from $11,665 to $23,331 for each false claim, plus treble damages, and exclude the entity from participation in Medicare, Medicaid and other federal healthcare programs. The government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the false claims statutes; |
• | the federal civil monetary penalties laws, which impose civil fines for, among other things, the offering or transfer of remuneration to a Medicare or state healthcare program beneficiary if the person knows or should know it is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of services reimbursable by Medicare or a state healthcare program, unless an exception applies; |
• | HIPAA and its implementing regulations, which created federal criminal laws that prohibit, among other things, executing or attempting to execute a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters. Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation; |
• | HIPAA, as amended by HITECH, and its implementing regulations, which also imposes certain regulatory and contractual requirements regarding the privacy, security and transmission of protected health information, or PHI; |
• | the federal Physician Payments Sunshine Act, which requires manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the government information related to certain payments or other “transfers of value” made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, and, beginning in 2022, physician assistants, nurse practitioners, and other practitioners, and requires applicable manufacturers to report annually to the government ownership and investment interests held by the providers described above and their immediate family members and payments or other “transfers of value” to such provider owners. Failure to submit required information may result in civil monetary penalties of $11,766 per failure up to an aggregate of $176,495 per year (or up to an aggregate of $1.177 million per year for “knowing failures”), for all payments, transfers of value or ownership or investment interests that are not timely, accurately, and completely reported in an annual submission, and may result in liability under other federal laws or regulations; |
• | federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; |
• | federal government price reporting laws, which require Bioventus to calculate and report complex pricing metrics in an accurate and timely manner to government programs, and where the failure to report such prices may expose Bioventus to potential liability; and |
• | state and foreign law equivalents of each of the above federal laws and regulations, such as anti-kickback, self-referral, fee-splitting and false claims laws that may apply to items or services reimbursed by any third-party payer, including commercial insurers; state laws that require pharmaceutical and device companies to comply with the industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise that restrict payments that may be made to healthcare providers; state laws that require drug and device manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures and pricing information; and state and foreign |
laws governing the privacy and security of certain health information, such as GDPR, which imposes obligations and restrictions on the collection and use of personal data relating to individuals located in the EU (including health data), many of which differ from each other in significant ways and some of which may be more stringent than HIPAA or HITECH. |
• | the scope of rights granted under the license agreement and other interpretation-related issues; |
• | whether and the extent to which Bioventus’ technology and processes infringe on intellectual property of the licensor that is not subject to the license agreement; |
• | Bioventus’ right to sublicense patent and other rights to third parties under collaborative development relationships; |
• | Bioventus’ diligence obligations with respect to the use of the licensed technology in relation to Bioventus’ development and commercialization of its products and technologies, and what activities satisfy those diligence obligations; and |
• | the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by Bioventus’ licensors and Bioventus and Bioventus’ partners. |
• | incur substantial monetary liability for infringement or other violations of intellectual property rights, which Bioventus may have to pay if a court decides that the product, service, or technology at issue infringes or violates the third-party’s rights, and if the court finds that the infringement was willful, Bioventus could be ordered to pay treble damages and the third-party’s attorneys’ fees; |
• | pay substantial damages to Bioventus’ customers or end users to discontinue use or replace infringing technology with non-infringing technology; |
• | stop manufacturing, offering for sale, selling, using, importing, exporting or licensing the product or technology incorporating the allegedly infringing technology or stop incorporating the allegedly infringing technology into such product, service, or technology; |
• | obtain from the owner of the infringed intellectual property right a license, which may require Bioventus to pay substantial upfront fees or royalties to sell or use the relevant technology and which may not be available on commercially reasonable terms, or at all; |
• | redesign Bioventus’ products, services, and technology so they do not infringe or violate the third-party’s intellectual property rights, which may not be possible or may require substantial monetary expenditures and time; |
• | enter into cross-licenses with Bioventus’ competitors, which could weaken Bioventus’ overall intellectual property position; |
• | lose the opportunity to license Bioventus’ technology to others or to collect royalty payments based upon successful protection and assertion of Bioventus’ intellectual property against others; |
• | find alternative suppliers for non-infringing products and technologies, which could be costly and create significant delay; or |
• | relinquish rights associated with one or more of Bioventus’ patent claims, if Bioventus’ claims are held invalid or otherwise unenforceable. |
• | others may be able to develop and/or practice technology that is similar to Bioventus’ technology or aspects of Bioventus’ technology, but that are not covered by the claims of the patents that Bioventus owns or controls, assuming such patents have issued or do issue; |
• | Bioventus or Bioventus’ licensors or any future strategic partners might not have been the first to conceive or reduce to practice the inventions covered by the issued patent or pending patent application that Bioventus owns or has exclusively licensed; |
• | Bioventus or Bioventus’ licensors or any future strategic partners might not have been the first to file patent applications covering certain of Bioventus’ inventions; |
• | others may independently develop similar or alternative technologies or duplicate any of Bioventus’ technologies without infringing Bioventus’ intellectual property rights; |
• | Bioventus’ pending patent applications may not lead to issued patents; |
• | issued patents that Bioventus owns or exclusively licenses may not provide Bioventus with any competitive advantage, or may be held invalid or unenforceable, as a result of legal challenges by Bioventus’ competitors; |
• | Bioventus’ competitors might conduct research and development activities in countries where Bioventus does not have patent rights and then use the information learned from such activities to develop competitive products for sale in Bioventus’ major commercial markets; |
• | third parties performing manufacturing or testing for Bioventus using Bioventus’ products or technologies could use the intellectual property of others without obtaining a proper license; |
• | parties may assert an ownership interest in Bioventus’ intellectual property and, if successful, such disputes may preclude Bioventus from exercising exclusive rights over that intellectual property; |
• | Bioventus may not develop or in-license additional proprietary technologies that are patentable; |
• | Bioventus may not be able to obtain and maintain necessary licenses on commercially reasonable terms, or at all; and |
• | the patents of others may adversely affect Bioventus’ business. |
• | changes in the valuation of Bioventus’ deferred tax assets and liabilities; |
• | expected timing and amount of the release of any tax valuation allowances; |
• | tax effects of equity-based compensation; |
• | changes in tax laws, regulations or interpretations thereof; or |
• | future earnings being lower than anticipated in countries where Bioventus has lower statutory tax rates and higher than anticipated earnings in countries where it has higher statutory tax rates. |
• | the augmentation, reorganization and training of Bioventus’ prescription to cash staff, which includes its direct sales team, order management personnel, patient financial services personnel and reimbursement services and accounts receivable personnel, regarding key aspects of regulations and requirements and how to deal with inconsistencies within patient medical records; |
• | implementation of monthly sales order testing on sampling basis by Bioventus’ Compliance department including a review of medical necessity; |
• | establishment of a cross functional governance committee, reporting to an executive steering committee to review and approve Bioventus’ Exogen Medicare policy and oversee future Exogen policy and process interpretations and changes; and |
• | implementation of a checklist to be completed for each Medicare order to ensure compliance with Bioventus’ policy for Medicare claims and then further automating this checklist. |
• | be exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that its independent registered public accounting firm provide an attestation report on the effectiveness of its internal control over financial reporting; |
• | be exempt from the “say on pay” and “say on golden parachute” advisory vote requirements of the Dodd-Frank Wall Street Reform and Customer Protection Act, or the Dodd-Frank Act; |
• | be exempt from certain disclosure requirements of the Dodd-Frank Act relating to compensation of its executive officers and be permitted to omit the detailed compensation discussion and analysis from proxy statements and reports filed under the Exchange Act; and |
• | be permitted to provide a reduced level of disclosure concerning executive compensation and be exempt from any rules that have been adopted by the Public Company Accounting Oversight Board requiring a supplement to the auditor’s report on the financial statements or that may be adopted requiring mandatory audit firm rotations. |
• | authorizing the issuance of “blank check” preferred stock that could be issued by Bioventus’ Board to increase the number of outstanding shares and thwart a takeover attempt; |
• | establishing a classified Board so that not all members of Bioventus’ Board are elected at one time; |
• | the removal of directors only for cause; |
• | prohibiting the use of cumulative voting for the election of directors; |
• | limiting the ability of stockholders to call special meetings or amend Bioventus’ bylaws; |
• | requiring all stockholder actions to be taken at a meeting of Bioventus’ stockholders; and |
• | establishing advance notice and duration of ownership requirements for nominations for election to the Board or for proposing matters that can be acted upon by stockholders at stockholder meetings. |
• | the failure to obtain necessary stockholder approvals for the share issuance and the adoption of the merger agreement; |
• | the failure to satisfy required closing conditions or complete the proposed acquisition in a timely manner or at all; |
• | the effect of the announcement of the proposed acquisition on each company’s ability to retain and hire key personnel, maintain business relationships, and on operating results and the businesses generally; |
• | the ability of Misonix to pursue alternatives to the proposed acquisition with us pursuant to the merger agreement; |
• | the diversion of Bioventus’ management’s attention from its core business as Bioventus works to take all steps necessary to close the transaction and integrate Misonix’s business into Bioventus’; |
• | the issuance of additional equity in connection with the acquisition may dilute Bioventus’ stockholders and the uncertainties related to the potential impact of the proposed acquisition on Bioventus’ stock price; |
• | the inability to achieve the anticipated synergies and Bioventus’ incurrence of significant transaction related costs in connection with the proposed acquisition that are, and will be, incurred regardless of whether the proposed acquisition is completed; and |
• | the occurrence of any event giving rise to the right to terminate the merger agreement. |
• | being required to pay costs and expenses relating to the transactions, such as legal, accounting, financial advisory and printing fees; and |
• | time and resources committed by Bioventus’ management to matters relating to the proposed acquisition could otherwise have been devoted to pursuing other beneficial opportunities. |
• | Bioventus Proposal 1: Approval of the Share Issuance |
• | Bioventus Proposal 2: Adjournment of the Bioventus Special Meeting |
• | Bioventus Proposal 1: FOR |
• | Bioventus Proposal 2: FOR |
Proposal |
Required Vote |
Effects of Certain Actions | ||
Bioventus Proposal 1: Bioventus share issuance proposal |
Assuming a quorum is present at the Bioventus special meeting, approval requires the affirmative vote of the holders of a majority in voting power of the votes cast on the Bioventus share issuance proposal. | Any shares not virtually present or represented by proxy (including due to the failure of an Bioventus stockholder who holds shares in “street name” through a bank, broker or other nominee to provide voting instructions to such bank, broker or other nominee) will have no effect on the outcome of the Bioventus share issuance proposal. | ||
An abstention or other failure of any shares virtually present or represented by proxy and entitled to vote at the Bioventus special meeting on the Bioventus share issuance proposal to vote on the Bioventus share issuance proposal will have the same effect as a vote “ AGAINST | ||||
Bioventus Proposal 2: Bioventus adjournment proposal |
Whether or not a quorum is present at the Bioventus special meeting, approval of the Bioventus adjournment proposal requires the affirmative vote of the holders of a majority in voting power of the votes cast on the Bioventus adjournment proposal. | Any shares not virtually present or represented by proxy (including due to the failure of an Bioventus stockholder who holds shares in “street name” through a bank, broker or other nominee to provide voting instructions to such bank, broker or other nominee) will have no effect on the outcome of the Bioventus adjournment proposal. An abstention or other failure of any shares virtually present or represented by proxy and entitled to vote at the Bioventus special meeting on the Bioventus adjournment proposal will have the same effect as a vote “ AGAINST |
• | By Internet |
• | By Telephone |
• | By Mail |
• | Virtually via the Bioventus Special Meeting Website 16-digit control number included on their proxy card in order to access the Bioventus special meeting website. |
• | by sending a signed written notice of revocation to Bioventus’s Corporate Secretary, provided such notice is received no later than [●], 2021; |
• | by voting again over the internet or telephone as instructed on your proxy card before the closing of the voting facilities at [●], Eastern Time, on [●], 2021; |
• | by submitting a properly signed and dated proxy card with a later date that is received by Bioventus no later than the close of business on [●], 2021; or |
• | by virtually attending the Bioventus special meeting via the Bioventus special meeting website and requesting that your proxy be revoked, or virtually voting via the Bioventus special meeting website as described above. |
• | Misonix Proposal 1 : Adoption of the Merger Agreement. |
• | Misonix Proposal 2 Approval, on an Advisory Non-Binding Basis, of Certain Merger-Related Compensatory Arrangements with Misonix’s Named Executive Officers. |
• | Misonix Proposal 3 Adjournment of the Misonix Special Meeting. |
• | Misonix Proposal 1: “FOR” |
• | Misonix Proposal 2: “FOR” |
• | Misonix Proposal 3: “FOR” |
Proposal |
Required Vote |
Effects of Certain Actions | ||
Misonix Proposal 1: Misonix merger proposal |
Approval requires the affirmative vote of the holders of a majority of the issued and outstanding shares of Misonix common stock. | An abstention or other failure to vote on the Misonix merger proposal will have the same effect as a vote “ AGAINST | ||
Misonix Proposal 2: Misonix compensation proposal |
Approval requires the affirmative vote of the holders of a majority of the votes cast at the Misonix special meeting. | An abstention or other failure to vote on the Misonix compensation proposal will not have an effect on the Misonix compensation proposal, assuming a quorum is present. | ||
Misonix Proposal 3: Misonix adjournment proposal |
Approval requires the affirmative vote of the holders of a majority of the votes cast at the Misonix special meeting. | An abstention or other failure to vote on the Misonix adjournment proposal will not have an effect on the Misonix adjournment proposal. |
• | By Internet |
• | By Telephone |
• | By Mail |
• | In person at the Misonix Special Meeting |
• | by sending a signed written notice of revocation to Misonix’s Secretary, provided such notice is received no later than [●], 2021; |
• | by voting again over the internet or via telephone as instructed on your proxy card before the closing of the voting facilities at [●], Eastern Time, on [●], 2021; |
• | by submitting a properly signed and dated proxy card with a later date that is received by Misonix no later than the close of business on [●], 2021; or |
• | by attending the Misonix special meeting in person and requesting that your proxy be revoked. |
• | all stock election shares and all no election shares will be exchanged for 1.6839 shares of Bioventus class A common stock; and |
• | a portion of the cash election shares of each Misonix stockholder will be exchanged for $28.00 in cash as follows: cash election shares exchanged for $28.00 in cash = |
• | all cash election shares will be exchanged for the cash consideration; and |
• | all stock election shares and no election shares will be treated in the following manner: |
• | if the shortfall amount is less than or equal to the product of the aggregate number of no election shares and $28.00, which we refer to as the “no election value”, then (1) all stock election shares will be exchanged for 1.6839 shares of Bioventus class A common stock, and (2) a portion of the no election shares of each Misonix stockholder, calculated as follows, will be exchanged for $28.00 in cash as follows (and the remaining portion of such stockholder’s no election shares, if any, will be exchanged for 1.6839 shares of Bioventus class A common stock): |
• | if the shortfall amount is more than the no election value, then (1) all no election shares will be exchanged for $28.00 in cash and (2) a portion of the stock election shares of each stockholder will be exchanged for $28.00 in cash as follows (and the remaining portion of such stockholder’s stock election shares will be exchanged for 1.6839 shares of Bioventus class A common stock): |
• | Benefits of the Acquisition. |
• | Bioventus’ and Misonix’s complementary focus on innovative medical device technologies, and that the combined company will be able to offer a broad range of safe, effective and clinically proven medical devices; |
• | that the combined company will have greater research and development resources, engineering expertise and technology, which will allow Bioventus to better serve customers and accelerate innovation; |
• | that the combined company’s complementary product offerings and engineering and technical strengths will be aligned with important growth trends, such as cost effective and hardware agnostic products used in spinal surgeries and the movement of a patient from the hospital to the ASC to the physician office for the treatment of wounds; |
• | that the cultures of Bioventus and Misonix are strongly aligned, including shared values and commitment to innovation, execution and results orientation, and that this culture, along with Bioventus’ commitment to excellence, will accelerate high performance growth; |
• | the expectation that the combined company will have increased financial strength and flexibility, with an estimated $400 million in combined revenue in the twelve month period prior to signing; |
• | that the merger would immediately diversify Bioventus’ revenue streams and be accretive to Bioventus’ revenue growth rate, without taking into account expected synergies; |
• | the expectation that the merger will create synergies of approximately $20 million by the end of the 2 nd full year subsequent to closing, driven primarily by lower operating expenses and cost of goods sold; and |
• | the expectation that the combined company will be well-capitalized with a stronger balance sheet. |
• | Exchange Ratio and Merger Consideration |
• | the fact that, the maximum cash amount payable by Bioventus will be an amount equal to $10.50 multiplied by the number of outstanding shares of Misonix common stock shortly prior to the completion of the transaction, which as of September 1, 2021, the latest practicable date before the filing of this merger, would be $183.0 million; |
• | the fact that, upon completion of the merger, Bioventus stockholders and former Misonix stockholders will own approximately 75% and 25%, respectively, of the combined company (based on fully diluted shares outstanding of the combined company); |
• | the oral opinion of Perella Weinberg, rendered to the Bioventus board on July 28, 2021, subsequently confirmed in a written opinion dated July 29, 2021, to the effect that, as of July 29, 2021, and subject to the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Perella Weinberg in connection with the preparation of its opinion, the merger consideration to be paid by Bioventus pursuant to the merger agreement was fair, from a financial point of view, to Bioventus (which opinion is more fully described below under “—Opinion of Bioventus’ Financial Advisor—Opinion of Perella Weinberg” and is attached as Annex B hereto); and |
• | Other Factors Considered by the Bioventus Board of Directors |
• | historical information concerning Bioventus’ and Misonix’s respective businesses, financial condition, results of operations, earnings, trading prices, technology positions, managements, competitive positions and prospects on stand-alone and forecasted combined bases; and |
• | the current and prospective business environment in which Bioventus and Misonix operate, including international, national and local economic conditions and the competitive and regulatory environment, and the likely effect of these factors on Bioventus and the combined company. |
• | Terms of the Merger Agreement |
• | the risk that, because the exchange ratio under the merger agreement would not be adjusted for changes in the market price of Bioventus or Misonix common stock, the then-current trading price of the shares of Bioventus class A common stock to be issued to holders of shares of Misonix common stock upon the consummation of the merger could be significantly higher than the trading price prevailing at the time the merger agreement was entered into; |
• | the fact that the opinion of Perella Weinberg as to the fairness, from a financial point of view, of the merger consideration to be paid by Bioventus pursuant to the merger agreement, to Bioventus speaks only as of the date of such opinion and did not and will not take into account events occurring or information that has become available after such date, including any changes in the operations and prospects of Bioventus or Misonix, general economic, monetary, market and other conditions and other factors that may be beyond the control of Bioventus and Misonix and on which the fairness opinions were based, any of which may be material; |
• | the risk that Misonix’s financial performance may not meet Bioventus’ expectations; |
• | the risk that the merger may not be completed or may be delayed despite the parties’ efforts, including the possibility that conditions to the parties’ obligations to complete the merger may not be satisfied, and the potential resulting disruptions to Bioventus’ and Misonix’s businesses; |
• | the potential length of the regulatory approval process and the possibility that governmental authorities might seek to require certain actions of Bioventus or Misonix or impose certain terms, conditions or limitations on Bioventus’ or Misonix’s businesses in connection with granting approval of the merger or might otherwise seek to prevent or delay the merger; |
• | the potential challenges and difficulties in integrating the operations of Bioventus and Misonix and the risk that anticipated cost savings and operational efficiencies between the two companies, or other anticipated cost benefits of the merger, might not be realized or might take longer to realize than expected; |
• | the difficulties and challenges inherent in completing the merger and integrating the businesses, operations and workforce of Misonix with those of Bioventus and the possibility of encountering difficulties in achieving expected revenue growth and other non-cost synergies; |
• | the possible diversion of management attention for an extended period of time during the pendency of the merger and, following closing, the integration of the two companies; |
• | the substantial costs to be incurred in connection with the merger, including those incurred regardless of whether the merger is consummated; |
• | that Bioventus would be required to pay to Misonix a termination fee of $ $20,661,000 in the event the merger agreement were to be terminated in certain circumstances if the Bioventus board changes its recommendation; |
• | the risk that Misonix stockholders may not approve the adoption of the merger agreement at the Misonix special meeting; |
• | the ability of the Misonix board, subject to certain conditions, to change its recommendation supporting the merger in response to a superior proposal or an intervening event other than a superior proposal, if the Misonix board determines that failure to take such action would reasonably be expected to be inconsistent with the Misonix board’s fiduciary duties to its stockholders under applicable laws; |
• | the ability of the Misonix board, subject to certain conditions, to terminate the merger agreement in order to enter into a definitive agreement providing for a superior proposal; and |
• | risks of the type and nature described under entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements.” |
• | the fact that the merger agreement provides for Misonix stockholders to receive, subject to the election described above and subject to proration, 1.6839 shares of Bioventus class A common stock or $28.00 in cash for each share of Misonix common stock held (the “merger consideration”); |
• | the merger consideration offers strong value for shares of Misonix common stock, based on a consideration of factors including: Misonix’s current and anticipated business and operations, historical results of operations, financial and market position, strategic business plans and prospects of Misonix on a standalone basis, value of Misonix as an independent entity based on the Misonix board and management’s experience and knowledge of the industry, opportunities and risks and uncertainties in executing Misonix’s strategic plans, and current and historical trading prices of Misonix common stock, including that the merger consideration, calculated as of July 27, 2021 (the day prior to the Misonix board’s consideration of the transaction) and based on the volume weighted average price of Bioventus’ class A common stock price for the seven-day period ending on July 27, 2021 of $16.63, values Misonix at approximately $518 million in equity value, which is a level at which Misonix has never traded and may not be able to trade at in the near term, over an extended period of time, or at all; |
• | the Misonix board’s belief that the increased merger consideration that Misonix was able to obtain as a result of negotiations with Bioventus was the highest price per share that Bioventus was willing to pay; |
• | the premium of the merger consideration to the market trading price of Misonix common stock compared to comparable transactions, with the implied value of the merger consideration calculated as of July 27, 2021 (the day prior to the Misonix board of director’s consideration of the transaction) and based on the volume weighted average price of Bioventus’s class A common stock price for the seven-day period ending on July 27, 2021 of $16.63, representing premiums of approximately: |
• | 20% over Misonix common stock’s closing price of $23.30 on the Nasdaq on July 27, 2021; |
• | 23% over Misonix common stock’s volume weighted average price of $22.68 on the Nasdaq for the 30-day period ended July 27, 2021; |
• | 29% over Misonix common stock’s volume weighted average price of $21.65 on the Nasdaq for the 60-day period ended July 27, 2021; and |
• | 34% over Misonix common stock’s volume weighted average price of $20.92 on the Nasdaq for the 90-day period ended July 27, 2021; |
• | the cash/stock election feature of the merger consideration, which offers Misonix stockholders the opportunity to participate post-closing in the potential growth and success of the combined company through the stock component of the merger consideration or to realize immediate and certain value for their investment through the cash component of the merger consideration, subject to a proration adjustment mechanism; |
• | the strategic considerations of the mergers, including: |
• | that Misonix’s stockholders would, to the extent they receive Bioventus class A common stock, benefit from being stockholders in a more risk-diversified business than Misonix currently maintains; |
• | the opportunity to combine the complementary strengths of Misonix and Bioventus to broaden distribution access, expand complementary product and service offerings, increase the scale and breadth of each of Misonix’s and Bioventus’s distribution and sales capabilities as compared to remaining independent companies, and improve operating efficiency of the combined company’s |
businesses, which are expected to position the combined company to be a strong player across a range of care settings and specialties, including pain treatments, restorative therapies, surgical solutions and sports medicine; |
• | that the strengths and increased size of the combined company would potentially cause Bioventus class A common stock to be afforded a higher valuation in the market that would benefit Misonix’s stockholders, to the extent they elect to receive Bioventus class A common stock as merger consideration; |
• | the combined company would have a greater market capitalization and increased trading liquidity as compared to Misonix’s historical market capitalization and trading liquidity; |
• | that Bioventus believes that the transaction will be accretive to its adjusted EBITDA in the first full year after completion of the mergers and accretive to its adjusted EBITDA margins by the second full year after completion of the mergers; |
• | the assessment of the Misonix board and Misonix senior management of Bioventus’s business, prospects and strategic plan; |
• | positive guidance from Bioventus regarding its anticipated future operating performance, and analysis of potential cost synergies that could cause Bioventus class A common stock to appreciate after the transactions close, which increase in price would benefit Misonix stockholders who become Bioventus stockholders in the mergers; |
• | that the significant cash portion of the merger consideration would limit the impact of any decline in the trading price of Bioventus class A common stock on the aggregate value of the merger consideration; |
• | the Misonix board’s expectation that the transaction will result in Misonix stockholders being able to participate in approximately $20 million of estimated run-rate cost synergies expected within two years of the completion of the mergers resulting from, among other things reduction of duplicative corporate costs and including public company expenses and general support, systems and infrastructure costs, as well as significant revenue synergies across the combined business through enhanced scale and cross-selling opportunities; |
• | that two members of the Misonix board would be appointed to the Bioventus board and would be able to contribute to the future strategy and growth of the combined company’s business; |
• | to the extent that the above-described or other factors cause the price of Bioventus class A common stock to appreciate over the period until the transaction closes, the value of the merger consideration would increase fractionally in equal proportion to the benefit of all Misonix stockholders to the extent they receive Bioventus class A common stock; and |
• | the mixed stock and cash consideration would enable Misonix stockholders to have a significant ownership position in the combined company (expected to be approximately 25% of the combined company) and participate in the value and opportunities of the combined company after the mergers, including synergies and expected future growth; |
• | the view of the Misonix board that the merger agreement was the product of arm’s length negotiations and contained customary terms and conditions for similar transactions, and its consideration of a number of other factors pertaining to the merger agreement, including: |
• | the right of the Misonix board to terminate the merger agreement if the requisite stockholder vote for Misonix or Bioventus were not obtained, in each case after a vote on such approval was taken; |
• | the limited scope of the closing conditions and the absence of a closing condition relating to Bioventus’s ability to finance its payment of the cash portion of the merger consideration; |
• | the end date under the merger agreement upon which either party, subject to specified exceptions, can terminate the merger agreement, should provide sufficient time to consummate the mergers; |
• | Misonix’s ability to specifically enforce Bioventus’s obligations under the merger agreement, including Bioventus’s obligation to consummate the mergers or to seek damages in the event of a willful and material breach of the merger agreement by Bioventus; |
• | that the mergers are intended to qualify as a reorganization for U.S. federal income tax purposes; |
• | that the merger agreement provides Misonix with sufficient operating flexibility between the signing of the merger agreement and the completion of the mergers to conduct its business in the ordinary course consistent with past practice; and |
• | the unanimous approval of the merger agreement by the Misonix board, which consists of a majority of independent directors who are not affiliated with Bioventus and are not employees of Misonix or any of its subsidiaries, and which retained and received advice from Misonix’s outside financial and legal advisors in evaluating, negotiating and recommending the terms of the merger agreement; |
• | that based on a review of the terms of the merger agreement with Misonix’s outside legal advisors, and assuming the mergers are attractive to Misonix stockholders, there is a high likelihood of completing the mergers, particularly in light of the terms of the merger agreement and the conditions to completing the mergers (see the sections of this joint proxy statement/prospectus captioned “—Conditions to Completion of the Mergers” and “—Regulatory Approvals”). In making its determination, the Misonix board considered a number of factors, including: |
• | Bioventus is obliged to use reasonable best efforts to (1) complete the mergers and obtain the necessary approvals and clearances required to complete the mergers as promptly as reasonably practical, and (2) resolve impediments or objections, if any, asserted by any governmental authority with respect to the mergers under antitrust laws (including divestitures or behavioral remedies), except for such remedies that would reasonably be expected to have a material adverse effect on the results of operations of Misonix or a material adverse effect on the results of operations of Bioventus, where, for purposes of determining whether an effect is or would be materially adverse to the results of operations of Bioventus, Bioventus will be deemed to be the same size (in operations and from a financial point of view) as Misonix; |
• | the voting and support agreement entered into in favor of Misonix by EW Healthcare Partners Acquisition Fund, L.P., White Pine Medical, LLC, Smith & Nephew, Inc., Smith & Nephew USD Ltd and AMP-CF Holdings, LLC as to approximately 67.4% of Bioventus shares; and |
• | Bioventus may not terminate the merger agreement to take a superior proposal or in response to an intervening event; |
• | that the mergers are expected to qualify as a “reorganization” within the meaning of Section 368(a) of the Code, as amended, and the rules and regulations promulgated thereunder, generally resulting in the mergers being tax-free to Misonix stockholders to the extent they receive Bioventus class A common stock pursuant to the mergers and taxable to holders of Misonix stockholders to the extent they receive cash consideration; |
• | the oral opinion that J.P. Morgan, Misonix’s financial advisor gave to the Misonix board on July 28, 2021, subsequently confirmed in writing by delivery of J.P. Morgan’s written opinion addressed to the Misonix board dated July 29, 2021, that, as of such date and based upon and subject to the assumptions made, procedures followed, matters considered, and qualifications and limitations undertaken by J.P. Morgan in preparing its opinion, the consideration to be paid to the Misonix stockholders pursuant to the merger agreement, was fair, from a financial point of view, to such holders, as more fully described in the section entitled “—Opinion of Misonix’s Financial Advisor, J.P. Morgan” of this joint proxy statement/prospectus; |
• | that the Misonix board determined that entering into the merger agreement with Bioventus presents the best opportunity to maximize value for the Misonix stockholders, based on consultation with senior |
management and Misonix’s financial and legal advisors and an evaluation of alternative transactions (including maintaining the status quo). In making its determination, the Misonix board considered a number of factors, including: |
• | the Misonix board’s assessment of Misonix’s business and operations, historical results of operations, financial prospects and conditions, and the determination that continued operation of Misonix on a standalone basis was not likely to produce, on a risk-adjusted basis, more value for Misonix stockholders than the merger consideration offered by Bioventus; |
• | the potential to create meaningful business opportunities and favorable market valuation effects for Bioventus as a result of combining with Misonix, from which Misonix stockholders would have the opportunity to benefit (in proportion for all Misonix stockholders to the extent reflected in the price performance of Bioventus class A common stock prior to the closing, and thereafter fully reflected in the value of the merger consideration received in the form of Bioventus class A common stock that is retained by Misonix stockholders post-closing); |
• | the fact that the merger consideration proposed by Bioventus included a fixed-share component, the value of which would be subject to market fluctuations from the announcement of any transaction until the closing of such transaction; |
• | the possibility that a delay in executing a definitive merger agreement might lead to an increased risk of leaks and market rumors prior to execution, which might harm Misonix in the event that an agreement was not reached; |
• | the Misonix board’s assessment at the time of such determination of the relative certainty of being able to expeditiously execute a definitive merger agreement with Bioventus and the relative uncertainty of being able to execute a definitive merger agreement with Company C on a similar timeline or at all; |
• | the risk of delaying the execution of a definitive merger agreement, including that potential market volatility associated with COVID or otherwise, might have a negative effect on the value of Misonix common stock and the perceived value of its business in the marketplace, and might affect Company C’s willingness to pursue a transaction; and |
• | the possibility that Company C was no longer interested in pursuing an acquisition of Misonix, or that a transaction with Company C would be complicated, tax inefficient and may not be accomplished on favorable terms or at all; |
• | the determination of the Misonix board that negotiating a potential transaction with Bioventus was most likely to result in the best transaction reasonably available for Misonix stockholders based on: |
• | Misonix’s process of reviewing strategic alternatives, including discussions with other potential bidders as part of its market check and discussions of reasons not to pursue other bidders, was appropriate; |
• | among the prospective bidders, Bioventus was best positioned to provide the highest value of consideration to Misonix stockholders in light of Bioventus’s strategic interest and priorities and the expected business opportunities and favorable market valuation effects for Bioventus arising from the mergers (benefitting all Misonix stockholders to the extent reflected in the price performance of Bioventus class A common stock prior to the closing of the merger and thereafter benefitting those Misonix stockholders who receive all or a portion of the merger consideration in Bioventus class A common stock that they continue to hold post-closing); |
• | the merger agreement provides the Misonix board the right to terminate the merger agreement to accept a superior proposal if the Misonix board determines that failure to do so would reasonably be expected to be inconsistent with its fiduciary duties; and |
• | the course of discussions and negotiations between Misonix and Bioventus resulted in improvement in the value of the consideration to be received by Misonix stockholders and the terms of the merger agreement, as compared with the initial proposal made by Bioventus; |
• | the fact that, while Misonix’s business continues to present opportunities for growth, it has also become subject to increasing competitive pressures, a changing competitive landscape, and continuing as a standalone company will subject Misonix’s stockholders to 100% of Misonix’s execution risk. |
• | that Misonix is required to use its reasonable best efforts to call, hold and initially schedule a stockholder meeting within 45 days after the effectiveness of Bioventus’s registration statement in connection with the mergers (to the extent not a violation of law); |
• | that Bioventus can terminate the merger agreement if the Misonix stockholder meeting is convened, a vote on the merger agreement is taken and the requisite approval of the Misonix stockholders is not obtained; |
• | that Bioventus can terminate the merger agreement if the Misonix board changes its recommendation that stockholders approve the Misonix merger proposal, in which case Misonix will be obligated to pay the termination fee; |
• | the possibility that a third party may be willing to enter into a strategic combination with Misonix on terms more favorable than the mergers and the potential that the no shop covenants and termination fees payable by Misonix under the merger agreement might deter alternative bidders that might have been willing to submit a superior proposal to Misonix, including the requirement that, if Misonix terminates the merger agreement under certain circumstances, Misonix may be required to pay Bioventus a termination fee of $20.7 million, or approximately 4% of transaction value, although the Misonix board believes that the termination fee is reasonable in amount, is customary and consistent with fees and provisions in comparable transactions and would not be preclusive of other offers; |
• | that following receipt of the Misonix stockholder approval, the Misonix board would be unable to change its recommendation in response to a superior proposal or an intervening event or to terminate the merger agreement to accept a superior proposal; |
• | the fact that the merger consideration in part consists of a fixed exchange ratio of shares of Bioventus class A common stock per share of Misonix common stock, the merger agreement does not provide for either any adjustment of such exchange ratio if the trading price of Bioventus class A common stock decreases or a value-based termination right to Misonix, and the value of the stock portion of the merger consideration at the closing will not be known at the time Misonix stockholders vote on the Merger Proposal, meaning that Misonix stockholders could be adversely affected to an unpredictable extent and the implied value of the merger consideration could decline if there is a decrease in the trading price of Bioventus class A common stock prior to the closing; |
• | the fact that the right of Misonix stockholders to elect to receive the cash portion of the merger consideration or the stock portion of the merger consideration is subject to proration such that the amount of cash to be received by Misonix stockholders in the mergers will, in the aggregate, be equal to $10.50 per share of Misonix common stock outstanding as of 5:00 p.m. New York City time on the election deadline, 2021, meaning that on an aggregate basis the merger consideration payable by Bioventus will be equal to $10.50 and 1.0524 shares of Bioventus class A common stock per share of Misonix common stock outstanding as of 5:00 p.m. New York City time on the election deadline, 2021 and Misonix stockholders will in the aggregate be fully exposed to fluctuations in price of Bioventus class A common stock prior to the completion of the mergers; |
• | the portion of the merger consideration being paid in cash would prevent Misonix stockholders from realizing the benefit of any increase in the trading price of Bioventus class A common stock during the pendency of the mergers; |
• | the significant costs involved in connection with entering into the merger agreement and the transactions contemplated thereby, and the substantial time and effort of management required to complete the transactions contemplated by the merger agreement, which may disrupt Misonix’s business operations; |
• | that the consummation of the mergers requires receipt of regulatory approvals and the risk that, notwithstanding Bioventus’s obligations with respect to obtaining regulatory approvals as set forth in the merger agreement, governmental entities may delay or fail to grant the required regulatory approvals or impose unfavorable terms or conditions on such approvals or that remedies implemented by Bioventus or Misonix to obtain regulatory approvals may adversely affect the business and financial results of the combined company; |
• | the restrictions in the merger agreement on the conduct of Misonix’s business during the period prior to consummation of the mergers, including that Misonix is required to conduct its business in the ordinary course, subject to specific limitations, which could delay or prevent Misonix from undertaking business opportunities or strategic transactions that may arise and that, absent the merger agreement, Misonix might have pursued; |
• | that certain of Misonix’s directors and executive officers may have interests in the mergers that may be different from, or in addition to, those of Misonix’s stockholders generally; |
• | the possibility that the mergers might not be consummated, which may cause Misonix to be required to pay its own expenses associated with the merger agreement and the transactions contemplated thereby; |
• | the possibility that the mergers might not be consummated, and the possible adverse effect of termination of the merger agreement on Misonix’s business or the trading price of Misonix common stock |
• | the risks that, even though the Misonix stockholder approval has been obtained, other conditions to the parties’ obligations to complete the mergers may not be satisfied; |
• | the effect of the public announcement of the merger agreement, including Misonix’s ability to attract and retain key personnel and to maintain client and distribution partner relations during the pendency of the transactions contemplated by the merger agreement, as well as the potential for litigation in connection with the mergers and the associated costs, burden and inconvenience involved in defending those proceedings; |
• | the risk that Bioventus may not be able to obtain sufficient financing to pay the cash portion of the merger consideration; |
• | the risk that anticipated cost savings and operational efficiencies between the two companies, or other anticipated benefits of the mergers, including potential revenue synergies across the combined business, might not be realized or might take longer to realize than expected; |
• | challenges inherent in the combination of two businesses of the size, scope and complexity of Misonix and Bioventus, including the potential for unforeseen difficulties in integrating operations, systems and employees and the potential impact of such difficulties on employees and relationships with existing and prospective customers, distribution partners, suppliers and other third parties; |
• | the risk that Misonix may lose members of management and other key personnel following announcement of the transaction and may not be able to effectively replace such persons, which could adversely affect Misonix’s business during the period prior to consummation of the mergers or, if the mergers are not consummated, during the period prior to and after the termination of the merger agreement, as Misonix’s operations are largely dependent on the skill and experience of its management and key personnel; |
• | for the portion of the merger consideration paid in Bioventus class A common stock and retained by Misonix stockholders following the closing of the transaction, the risk that Bioventus fails to provide holders of Bioventus class A common stock with acceptable returns; |
• | the possibility that execution of Misonix’s standalone business plan or other strategic alternatives available to Misonix may have provided greater value to Misonix stockholders than the mergers; |
• | the uncertainty as to whether soliciting potential purchasers of Misonix other than Bioventus would yield greater value to Misonix and its stockholders; |
• | the possibility that a combination with Company C or another party may have provided greater value to Misonix stockholders than the mergers; and |
• | risks of the type and nature described under the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.” |
• | reviewed certain publicly available financial statements and other publicly available business and financial information with respect to Misonix and Bioventus, including equity research analyst reports; |
• | reviewed certain publicly available financial forecasts relating to the business and financial prospects of Misonix, derived from a consensus of selected equity research analysts that were identified by Misonix’s management and discussed with Perella Weinberg by Misonix for use in Perella Weinberg’s analysis, as adjusted by Bioventus management, and which forecasts were extrapolated by the management of Bioventus for certain fiscal years (the “Adjusted and Extrapolated Misonix Street Forecasts”) and approved for Perella Weinberg’s use by Bioventus; |
• | reviewed certain publicly available financial forecasts relating to the business and financial prospects of Bioventus, derived from a consensus of selected equity research analysts that were identified by Bioventus’s management, as adjusted by the management of Bioventus (the “Adjusted Bioventus Street Forecasts”), and approved for Perella Weinberg’s use by Bioventus; |
• | reviewed certain internal financial statements, analyses and/or other financial and operating data relating to the business of Misonix and Bioventus, prepared by the management of Misonix and the management of Bioventus, respectively; |
• | discussed the past and current business, operations, financial condition and prospects of Misonix with representatives of Misonix and Bioventus; |
• | discussed the past and current business, operations, financial condition and prospects of Bioventus with representatives of Bioventus; |
• | discussed with members of the senior managements of Misonix and Bioventus their assessment of the strategic rationale for, and the potential benefits of, the mergers; |
• | reviewed certain estimates as to the amount and timing of certain cost savings anticipated by the management of Bioventus to result from the consummation of the mergers (the “Cost Savings”), as prepared by the management of Bioventus and approved for Perella Weinberg’s use by Bioventus; |
• | compared the financial performance of Misonix and Bioventus with that of certain publicly-traded companies which Perella Weinberg believed to be generally relevant; |
• | compared the financial terms of the mergers with the publicly available financial terms of certain other transactions which Perella Weinberg believed to be generally relevant; |
• | reviewed the historical trading prices for Misonix common stock and Bioventus common stock; |
• | participated in discussions among representatives of Misonix and Bioventus and their respective advisors; |
• | reviewed a draft of the merger agreement dated July 28, 2021; and |
• | conducted such other financial studies, analyses and investigations, and considered such other factors, as Perella Weinberg deemed appropriate. |
Selected Bioventus Publicly Traded Companies |
||||
Alphatec Holdings, Inc. |
||||
Anika Therapeutics, Inc. |
||||
Axogen, Inc. |
||||
CONMED Corporation |
||||
Globus Medical, Inc. |
||||
Integra LifeSciences Holdings Corporation |
||||
NuVasive, Inc. |
||||
Organogenesis Holdings Inc. |
||||
Orthofix Medical Inc. |
||||
SeaSpine Holdings Corporation |
||||
Surgalign Holdings, Inc. |
||||
Vericel Corporation |
EV/2021E and 2022E Revenue and EBITDA Multiples |
EV/2021E revenue |
EV/2022E revenue |
EV/2021E Adj. EBITDA |
EV/2022E Adj. EBITDA |
||||||||||||
Selected Bioventus Publicly Traded Companies |
||||||||||||||||
Alphatec Holdings, Inc. |
9.0x | 7.5x | NM | (1) |
NM | (1) | ||||||||||
Anika Therapeutics, Inc. |
3.8x | 3.3x | 34.9x | 24.1x | ||||||||||||
Axogen, Inc. |
6.0x | 5.3x | NM | (1) |
NM | (1) | ||||||||||
CONMED Corporation |
4.9x | 4.5x | 24.3x | 21.2x | ||||||||||||
Globus Medical, Inc. |
9.1x | 8.3x | 26.4x | 23.4x | ||||||||||||
Integra LifeSciences Holdings Corporation |
4.8x | 4.6x | 19.4x | 17.5x | ||||||||||||
NuVasive, Inc. |
3.6x | 3.4x | 14.5x | 13.2x | ||||||||||||
Organogenesis Holdings Inc. |
4.5x | 4.1x | 28.6x | 22.2x | ||||||||||||
Orthofix Medical Inc. |
1.6x | 1.5x | 13.8x | 11.2x | ||||||||||||
SeaSpine Holdings Corporation |
3.7x | 3.3x | NM | (1) |
NM | (1) | ||||||||||
Surgalign Holdings, Inc. |
1.0x | 0.9x | NM | (1) |
NM | (1) | ||||||||||
Vericel Corporation |
21.3x | 15.6x | NM | (2) |
NM | (2) | ||||||||||
Median |
4.7x | 4.3x | 24.3x | 21.2x | ||||||||||||
Bioventus |
2.6x | 2.3x | 13.7x | 11.7x |
(1) |
Multiple excluded from Perella Weinberg’s analysis because the relevant EBITDA value was negative and considered not meaningful, “NM”. |
(2) |
Multiple excluded from Perella Weinberg’s analysis because the figure was greater than 50.0x and considered not meaningful, “NM”. |
• | calculating the present value as of July 27, 2021 of the estimated standalone unlevered free cash flows (calculated as adjusted operating income after taxes, plus depreciation, minus capital expenditures, and adjusting for changes in net working capital) that Bioventus could generate for the second half of calendar year 2021 and the complete calendar years 2022 through 2025 using discount rates ranging from 7.75% to 8.75% based on estimates of the weighted average cost of capital of Bioventus derived using the CAPM, and |
• | adding the present value as of July 27, 2021 of the terminal value of Bioventus at the end of calendar year 2025 using perpetuity growth rates ranging from 3.0% to 4.0% and using discount rates ranging from 7.75% to 8.75%. |
Selected Misonix Publicly Traded Companies |
||||
Alphatec Holdings, Inc. |
||||
Anika Therapeutics, Inc. |
||||
Apyx Medical Corporation |
||||
Axogen, Inc. |
||||
CONMED Corporation |
||||
Globus Medical, Inc. |
||||
Integra LifeSciences Holdings Corporation |
||||
MiMedx Group, Inc. |
||||
NuVasive, Inc. |
||||
Organogenesis Holdings Inc. |
||||
PolarityTE, Inc. |
||||
Vericel Corporation |
EV/2021E and 2022E Revenue Multiples |
2021E |
2022E |
||||||
Selected Misonix Publicly Traded Companies |
||||||||
Alphatec Holdings, Inc. |
9.0x | 7.5x | ||||||
Anika Therapeutics, Inc. |
3.8x | 3.3x | ||||||
Apyx Medical Corporation |
7.6x | 5.5x | ||||||
Axogen, Inc. |
6.0x | 5.3x | ||||||
CONMED Corporation |
4.9x | 4.5x | ||||||
Globus Medical, Inc. |
9.1x | 8.3x | ||||||
Integra LifeSciences Holdings Corporation |
4.8x | 4.6x | ||||||
MiMedx Group, Inc. |
6.9x | 6.3x | ||||||
NuVasive, Inc. |
3.6x | 3.4x | ||||||
Organogenesis Holdings Inc. |
4.5x | 4.1x | ||||||
PolarityTE, Inc. |
2.7x | 16.4x | ||||||
Vericel Corporation |
21.3x | 15.6x | ||||||
Median |
5.5x | 5.4x | ||||||
Bioventus |
2.6x | 2.3x | ||||||
Misonix |
5.5x | 4.7x |
• | calculating the present value as of July 27, 2021 of the estimated standalone unlevered free cash flows (calculated as adjusted operating income after taxes, plus depreciation, minus capital expenditures, and adjusting for changes in net working capital) that Misonix could generate for the second half of calendar year 2021 and the complete calendar years 2022 through 2031, as included in the Adjusted and Extrapolated Misonix Street Forecasts, using discount rates ranging from 8.5% to 9.5% based on estimates of the weighted average cost of capital of Misonix derived using the capital asset pricing model, or CAPM, and |
• | adding the present value as of July 27, 2021 of the terminal value of Misonix at the end of calendar year 2031 using perpetuity growth rates ranging from 3.0% to 4.0% and using discount rates ranging from 8.5% to 9.5%. |
• | calculating the present value as of July 27, 2021 of the estimated unlevered free cash flows (calculated as adjusted operating income after taxes, plus depreciation, minus capital expenditures, and adjusting for changes in net working capital) that Misonix could generate for the second half of the calendar year 2021 and the complete calendar years 2022 through 2031, as included in the Adjusted and Extrapolated Misonix Street Forecasts, using discount rates ranging from 8.5% to 9.5% based on estimates of the weighted average cost of capital of Misonix derived using the capital asset pricing model, or CAPM, and |
• | adding the present value as of July 27, 2021 of the terminal value of Misonix at the end of calendar year 2031 using perpetuity growth rates ranging from 3.0% to 4.0% and using discount rates ranging from 8.5% to 9.5%, and |
• | adding the present value as of July 27, 2021 of the cost savings and related cash flows. |
Announcement Date |
Target |
Acquiror |
EV/LTM Revenue Multiple |
EV/NTM Revenue Multiple |
||||||||
March 2021 | Lumenis Ltd. (Surgical Business) | Boston Scientific Corporation | N/A | 5.4x | (1) | |||||||
January 2021 | Preventice Solutions, Inc. | Boston Scientific Corporation | 7.8x | (2) |
N/A | |||||||
January 2021 | Cantel Medical | Steris plc | 4.3x | 3.9x | ||||||||
December 2020 | BioTelemetry, Inc. | Koninklijke Philips N.V. | 6.2x | 5.3x | ||||||||
December 2020 | ACell, Inc. | Integra LifeSciences Holdings Corporation |
4.0x | (3) |
N/A | |||||||
October 2020 | Key Surgical | Steris plc | N/A | 5.0x | (4) | |||||||
July 2020 | Medicrea International | Medtronic plc | 7.6x | 7.3x | ||||||||
January 2020 | Arthrosurface, Inc. | Anika Therapeutics, Inc. | 3.4x | (5) |
N/A | |||||||
November 2019 | Wright Medical Group N.V. | Stryker Corporation | 5.8x | 5.5x | ||||||||
July 2019 | Hu-Friedy Manufacturing Co., LLC |
Cantel Medical | 3.6x | (6) |
N/A | |||||||
May 2019 | Vertiflex, Inc. | Boston Scientific Corporation | 18.0x | (7) |
9.4x | (7) | ||||||
March 2019 | MyoScience, Inc. | Pacira Pharmaceuticals Inc. | 40.3x | (8) |
N/A | |||||||
December 2018 | Buffalo Filter LLC | CONMED Corporation | 8.3x | 7.6x | ||||||||
August 2018 | Cartiva, Inc. | Wright Medical Group N.V. | 18.0x | 12.4x | ||||||||
December 2017 | Entellus Medical, Inc. | Stryker Corporation | 8.2x | 6.3x | ||||||||
October 2017 | Jotec GmbH | CryoLife, Inc. | 4.4x | 3.8x | ||||||||
June 2017 | Novadaq Technologies Inc. | Stryker Corporation | 7.8x | 6.0x | ||||||||
February 2017 | ZELTIQ Aesthetics, Inc. | Allergan plc | 6.8x | 5.9x | ||||||||
February 2016 | Sage Products LLC | Stryker Corporation | 6.5x | (9) |
N/A | |||||||
Mean |
9.5x | 6.4x | ||||||||||
Median |
6.8x | 5.9x |
(1) |
NTM calculated using expected 2021 revenues. |
(2) |
Transaction value includes the approximately 22% of Preventice Solutions already owned by Boston Scientific Corporation; LTM calculated using 2020 revenues. |
(3) |
Transaction value includes $300 million upfront and a $100 million earnout; LTM revenue calculated as of March 31, 2020, the latest date for which filings were available. |
(4) |
Transaction value includes approximately $40 million of tax benefit; NTM calculated using expected 2020 revenues. |
(5) |
Transaction value includes $60 million upfront and a $40 million earnout; LTM calculated using expected 2019 revenues. |
(6) |
Transaction value includes $50 million of milestone payments and $100 million of tax benefits. |
(7) |
Transaction value includes $465 million upfront and a $100 million earnout; LTM revenue uses 2018 revenues; NTM Revenue calculated using expected 2019 revenues. |
(8) |
Transaction value includes $120 million upfront and a $100 million earnout. |
(9) |
Transaction value includes $500 million of tax asset. |
• | reviewed the merger agreement; |
• | reviewed certain publicly available business and financial information concerning Misonix and Bioventus and the industries in which they operate; |
• | compared the proposed financial terms of the merger with the publicly available financial terms of certain transactions involving companies J.P. Morgan deemed relevant and the consideration paid for such companies; |
• | compared the financial and operating performance of Misonix and Bioventus with publicly available information concerning certain other companies J.P. Morgan deemed relevant and reviewed the current and historical market prices of Misonix common stock and Bioventus class A common stock and certain publicly traded securities of such other companies; |
• | reviewed certain internal financial analyses and forecasts prepared by or at the direction of the management of Misonix relating to Misonix’s and Bioventus’ respective businesses, as well as the estimated amount and timing of the cost synergies expected by the management of Misonix to result from the proposed first merger; and |
• | performed such other financial studies and analyses and considered such other information as J.P. Morgan deemed appropriate for the purposes of its opinion. |
• | ConvaTec Group plc; |
• | Integra LifeSciences Holdings Corporation; |
• | ConMed Corporation; |
• | NuVasive, Inc.; |
• | Avanos Medical, Inc.; |
• | AxoGen, Inc.; |
• | Orthofix Medical Inc.; |
• | SurModics, Inc.; |
• | Vapotherm, Inc.; |
• | Anika Therapeutics, Inc.; |
• | Intersect ENT, Inc.; and |
• | Sientra, Inc. |
Equity Value ($ in millions) |
Firm Value ($ in millions) |
FV/ 2021E Revenue Multiple |
FV/ 2022E Revenue Multiple |
|||||||||||||
ConvaTec Group plc |
7,305 | 8,288 | 4.1x | 3.9x | ||||||||||||
Integra LifeSciences Holdings Corporation |
6,111 | 7,452 | 4.9x | 4.6x | ||||||||||||
ConMed Corporation |
4,271 | 4,975 | 4.9x | 4.5x | ||||||||||||
NuVasive, Inc. |
3,487 | 4,298 | 3.6x | 3.3x | ||||||||||||
Avanos Medical, Inc. |
1,769 | 1,932 | 2.6x | 2.5x | ||||||||||||
AxoGen, Inc. |
875 | 839 | 6.3x | 5.5x | ||||||||||||
Orthofix Medical Inc. |
780 | 712 | 1.5x | 1.5x | ||||||||||||
SurModics, Inc. |
777 | 755 | 7.1x | 6.3x | ||||||||||||
Vapotherm, Inc. |
659 | 618 | 7.1x | 6.3x | ||||||||||||
Anika Therapeutics, Inc. |
609 | 546 | 3.8x | 3.3x | ||||||||||||
Intersect ENT, Inc. |
759 | 701 | 5.9x | 4.9x | ||||||||||||
Sientra, Inc. |
462 | 439 | 5.3x | 4.6x | ||||||||||||
Median |
4.9x | 4.5x |
Implied Equity Value Per Share of Misonix common stock |
||||||||
Low |
High |
|||||||
FV/2021E Revenue |
$ | 11.20 | $ | 30.20 | ||||
FV/2022E Revenue |
$ | 15.60 | $ | 38.20 |
Target |
Acquiror |
Announcement Date | ||
BioTelemetry, Inc. |
Royal Philips |
December 18, 2020 | ||
Wright Medical Group N.V. |
Stryker Corporation |
November 04, 2019 | ||
Buffalo Filter LLC |
Conmed Corporation |
December 13, 2018 | ||
K2M Group Holdings, Inc. |
Stryker Corporation |
August 30, 2018 | ||
The Spectranetics Corporation |
Royal Philips |
June 28, 2017 | ||
Vascular Solutions, Inc. |
Teleflex Incorporated |
December 02, 2016 | ||
LDR Holding Corporation |
Zimmer Biomet Holdings, Inc. |
June 07, 2016 | ||
AngioScore Inc. |
The Spectranetics Corporation |
May 27, 2014 | ||
Given Imaging Ltd. |
Covidien plc |
December 08, 2013 | ||
Conceptus, Inc. |
Bayer Healthcare LLC |
April 29, 2013 |
Target |
Acquiror |
Target Company FV Implied in the Transaction ($ in millions) |
|
FV/NTM Revenue Multiple of Target Company |
||||||||
BioTelemetry, Inc. |
Royal Philips |
2,706 | 5.4x | |||||||||
Wright Medical Group N.V. |
Stryker Corporation |
5,374 | 5.3x | |||||||||
Buffalo Filter LLC |
Conmed Corporation |
365 | 7.5x | |||||||||
K2M Group Holdings, Inc. |
Stryker Corporation |
1,311 | 4.3x | |||||||||
The Spectranetics Corporation |
Royal Philips |
2,035 | 6.6x | |||||||||
Vascular Solutions, Inc. |
Teleflex Incorporated |
972 | 5.3x | |||||||||
LDR Holding Corporation |
Zimmer Biomet Holdings, Inc. |
1,031 | 5.1x | |||||||||
AngioScore Inc. |
The Spectranetics Corporation |
230 | 3.7x | |||||||||
Given Imaging Ltd. |
Covidien plc |
860 | 4.0x | |||||||||
Conceptus, Inc. |
Bayer Healthcare LLC |
1,106 | 6.7x | |||||||||
Mean |
5.4x | |||||||||||
Median |
5.3x |
• | Globus Medical, Inc.; |
• | Hill-Rom Holdings, Inc.; |
• | Integra LifeSciences Holdings Corporation; |
• | ICU Medical, Inc.; |
• | ConMed Corporation; |
• | Merit Medical Systems, Inc.; |
• | NuVasive, Inc.; |
• | Medacta Group SA; |
• | Avanos Medical, Inc.; |
• | Orthofix Medical Inc.; and |
• | Anika Therapeutics, Inc. |
Equity Value ($ in millions) |
Firm Value ($ in millions) |
FV/ 2021E Revenue Multiple |
FV/ 2022E Revenue Multiple |
FV/ 2021E EBITDA Multiple |
FV/ 2021E EBITDA Multiple |
|||||||||||||||||||
Globus Medical, Inc. |
8,808 | 8,410 | 9.1x | 8.2x | 26.1x | 23.0x | ||||||||||||||||||
Hill-Rom Holdings, Inc. |
8,321 | 9,785 | 3.3x | 3.2x | 14.1x | 13.6x | ||||||||||||||||||
Integra LifeSciences Holdings Corporation |
6,111 | 7,452 | 4.9x | 4.6x | 19.6x | 17.1x | ||||||||||||||||||
ICU Medical, Inc. |
4,317 | 3,929 | 3.2x | 3.1x | 15.4x | 13.5x | ||||||||||||||||||
ConMed Corporation |
4,271 | 4,975 | 4.9x | 4.5x | 23.7x | 20.9x | ||||||||||||||||||
Merit Medical Systems, Inc. |
3,735 | 4,077 | 4.0x | 3.8x | 20.8x | 18.7x | ||||||||||||||||||
NuVasive, Inc. |
3,487 | 4,298 | 3.6x | 3.3x | 14.3x | 12.9x | ||||||||||||||||||
Medacta Group SA |
2,989 | 3,111 | 6.9x | 6.0x | 23.4x | 19.6x | ||||||||||||||||||
Avanos Medical, Inc. |
1,769 | 1,932 | 2.6x | 2.5x | 17.1x | 14.5x | ||||||||||||||||||
Orthofix Medical Inc. |
780 | 712 | 1.5x | 1.5x | 12.5x | 11.1x | ||||||||||||||||||
Anika Therapeutics, Inc. |
609 | 546 | 3.8x | 3.3x | 35.0x | 24.1x | ||||||||||||||||||
Median |
3.8x | 3.3x | 19.6x | 17.1x |
Implied Equity Value Per Share of Bioventus common stock |
||||||||
Low |
High |
|||||||
FV/ 2021E Revenue |
$ | 8.30 | $ | 31.10 | ||||
FV/2022E Revenue |
$ | 9.50 | $ | 32.80 | ||||
FV/2021E EBITDA |
$ | 14.50 | $ | 42.90 | ||||
FV/2022E EBITDA |
$ | 15.10 | $ | 34.40 |
Implied Exchange Ratio |
||||||||
Low |
High |
|||||||
Trading Multiples – Misonix FV/2021E Revenue / Bioventus FV/2021E EBITDA |
0.2611x | 2.0828x | ||||||
Trading Multiples – Misonix FV/2022E Revenue / Bioventus FV/2022E EBITDA |
0.4535x | 2.5298x | ||||||
Discounted Cash Flow (1) |
0.7198x | 1.6725x |
(1) |
Excluding cost synergies. |
Year Ending December |
||||||||||||||||||||
(in millions) |
FY21E |
FY22E |
FY23E |
FY24E |
FY25E |
|||||||||||||||
Revenue |
$ | 413 | $ | 462 | $ | 525 | $ | 585 | $ | 644 | ||||||||||
Adjusted EBITDA (1) |
79 | 92 | 102 | 127 | 147 | |||||||||||||||
Unlevered free cash flow (2) |
51 | 53 | 57 | 74 | 89 |
(1) |
Adjusted EBITDA, a non-GAAP financial measure, refers to earnings before interest, tax, depreciation and amortization, excluding the impact of stock-based compensation expense and other cash and non-cash items that Bioventus does not consider in its evaluation of ongoing operating performance. |
(2) |
Unlevered free cash flow, a non-GAAP financial measure, refers to Adjusted EBITDA less stock-based compensation, which is treated as a cash expense, less taxes, change in net working capital and capital expenditures. |
Year Ending December |
||||||||||||||||||||||||
(in millions) |
2021E |
2022E |
2023E |
2024E |
2025E |
2026E |
||||||||||||||||||
Revenue |
$ | 80 | $ | 94 | $ | 110 | $ | 129 | $ | 151 | $ | 177 | ||||||||||||
Adjusted EBITDA (1) |
(3 | ) | 2 | 11 | 19 | 29 | 37 | |||||||||||||||||
Unlevered free cash flow (2) |
(9 | ) | (4 | ) | 3 | 8 | 15 | 20 |
Year Ending December |
||||||||||||||||||||
(in millions) |
2027E |
2028E |
2029E |
2030E |
2031E |
|||||||||||||||
Revenue |
$ | 205 | $ | 232 | $ | 258 | $ | 283 | $ | 304 | ||||||||||
Adjusted EBITDA (1) |
46 | 56 | 68 | 79 | 91 | |||||||||||||||
Unlevered free cash flow (2) |
26 | 33 | 41 | 50 | 58 |
(1) |
Adjusted EBITDA, a non-GAAP financial measure, refers to earnings before interest, tax, depreciation and amortization, excluding the impact of stock-based compensation expense and other cash and non-cash items that Bioventus does not consider in its evaluation of ongoing operating performance. |
(2) |
Unlevered free cash flow, a non-GAAP financial measure, refers to Adjusted EBITDA less stock-based compensation, which is treated as a cash expense, less taxes, change in net working capital and capital expenditures. |
Fiscal Year Ended, June 30 |
||||||||||||||||||||
(in millions) |
2022E |
2023E |
2024E |
2025E |
2026E |
|||||||||||||||
Revenue |
$ | 98.0 | $ | 125.4 | $ | 156.4 | $ | 194.0 | $ | 234.8 | ||||||||||
Gross Profit |
$ | 70.8 | $ | 90.6 | $ | 113.4 | $ | 141.0 | $ | 170.3 | ||||||||||
Adjusted EBITDA (1)(5) |
$ | 4.3 | $ | 12.1 | $ | 21.6 | $ | 33.7 | $ | 44.6 | ||||||||||
Adjusted EBIT (2)(5) |
$ | (2.1 | ) | $ | 5.7 | $ | 15.0 | $ | 26.0 | $ | 30.1 | |||||||||
Net Operating Profit after Tax (3)(5) |
$ | (2.1 | ) | $ | 5.7 | $ | 15.0 | $ | 26.0 | $ | 30.1 | |||||||||
Unlevered Free Cash Flow (4)(5) |
$ | 1.6 | $ | 5.3 | $ | 14.5 | $ | 22.2 | $ | 29.0 |
(1) | Adjusted EBITDA is a non-GAAP financial measure which is calculated as earnings before interest expense, taxes, depreciation & amortization and further adjusted to exclude non-cash items and certain other adjustments like stock based compensation expense. |
(2) | Adjusted EBIT is a non-GAAP financial measure which is calculated as Adjusted EBITDA further adjusted to exclude stock based compensation expense and depreciation & amortization. |
(3) | Net Operating Profit after Tax (“NOPAT”) is a non-GAAP financial measure, which is calculated as Adjusted EBIT less estimated tax expense, which assumes a marginal tax rate of 23% and accounts for Misonix’s net operating loss balance. |
(4) | Unlevered Free Cash Flow is a non-GAAP financial measure, which is calculated as a NOPAT plus depreciation & amortization, less capital expenditures and change in net working capital. |
(5) | See below under the heading “Non-GAAP Financial Measures” for a reconciliation of the non-GAAP financial measure to its related GAAP financial measure |
Fiscal Year Ended, June 30 |
||||||||||||||||||||
(in millions) |
2022E |
2023E |
2024E |
2025E |
2026E |
|||||||||||||||
Revenue |
$ | 98.2 | $ | 130.3 | $ | 161.5 | $ | 198.3 | $ | 243.1 | ||||||||||
Gross Profit |
$ | 70.2 | $ | 93.1 | $ | 115.2 | $ | 141.3 | $ | 173.0 | ||||||||||
Adjusted EBITDA (1)(5) |
$ | 2.3 | $ | 13.2 | $ | 21.3 | $ | 31.5 | $ | 45.7 | ||||||||||
Adjusted EBIT (2)(5) |
$ | (5.2 | ) | $ | 6.7 | $ | 14.7 | $ | 24.7 | $ | 38.8 | |||||||||
Net Operating Profit after Tax (3)(5) |
$ | (5.2 | ) | $ | 6.7 | $ | 14.7 | $ | 23.5 | $ | 31.7 | |||||||||
Unlevered Free Cash Flow (4)(5) |
$ | (9.7 | ) | $ | 4.5 | $ | 11.9 | $ | 16.1 | $ | 27.0 |
(1) | Adjusted EBITDA is a non-GAAP financial measure which is calculated as earnings before interest expense, taxes, depreciation & amortization and further adjusted to exclude non-cash items and certain other adjustments like stock based compensation expense. |
(2) | Adjusted EBIT is a non-GAAP financial measure which is calculated as Adjusted EBITDA further adjusted to exclude stock based compensation expense and depreciation & amortization. |
(3) | Net Operating Profit after Tax (“NOPAT”) is a non-GAAP financial measure, which is calculated as Adjusted EBIT less estimated tax expense, which assumes a marginal tax rate of 23% and accounts for Misonix’s net operating loss balance. |
(4) | Unlevered Free Cash Flow is a non-GAAP financial measure, which is calculated as a NOPAT plus depreciation & amortization, less capital expenditures and change in net working capital. |
(5) | See below under the heading “Non-GAAP Financial Measures” for a reconciliation of the non-GAAP financial measure to its related GAAP financial measure |
Fiscal Year Ended, June 30 |
||||||||||||||||||||
(in millions) |
2022E |
2023E |
2024E |
2025E |
2026E |
|||||||||||||||
Revenue |
$ | 98.0 | $ | 125.4 | $ | 156.4 | $ | 194.0 | $ | 234.8 | ||||||||||
Cost of Revenue |
$ | (27.2 | ) | $ | (34.8 | ) | $ | (43.1 | ) | $ | (53.1 | ) | $ | (64.5 | ) | |||||
Gross Profit |
$ | 70.8 | $ | 90.6 | $ | 113.4 | $ | 141.0 | $ | 170.3 | ||||||||||
Operating Expenses |
$ | (73.4 | ) | $ | (85.5 | ) | $ | (99.1 | ) | $ | (114.6 | ) | $ | (132.8 | ) | |||||
Income / (Loss) from Operations (GAAP) |
$ |
(2.6 |
) |
$ |
5.1 |
$ |
14.3 |
$ |
26.3 |
$ |
37.4 |
|||||||||
Bad Debt Expense |
$ | 0.4 | $ | 0.6 | $ | 0.7 | $ | 0.9 | $ | 0.8 | ||||||||||
Adjusted EBIT (Non-GAAP) |
$ |
(2.1 |
) |
$ |
5.7 |
$ |
15.0 |
$ |
27.2 |
$ |
38.2 |
|||||||||
Income / (Loss) from Operations (GAAP) |
$ | (2.6 | ) | $ | 5.1 | $ | 14.3 | $ | 26.3 | $ | 37.4 | |||||||||
Bad Debt Expense |
$ | 0.4 | $ | 0.6 | $ | 0.7 | $ | 0.9 | $ | 0.8 | ||||||||||
Adjusted EBIT (Non-GAAP) |
$ | (2.1 | ) | $ | 5.7 | $ | 15.0 | $ | 27.2 | $ | 38.2 | |||||||||
Depreciation & Amortization |
$ | 4.9 | $ | 5.0 | $ | 5.2 | $ | 5.0 | $ | 5.0 | ||||||||||
Stock Based Compensation Expense |
$ | 1.5 | $ | 1.4 | $ | 1.4 | $ | 1.4 | $ | 1.4 | ||||||||||
Adjusted EBITDA (Non-GAAP) |
$ |
4.3 |
$ |
12.1 |
$ |
21.6 |
$ |
33.7 |
$ |
44.6 |
Fiscal Year Ended, June 30 |
||||||||||||||||||||
(in millions) |
2022E |
2023E |
2024E |
2025E |
2026E |
|||||||||||||||
Revenue |
$ | 98.2 | $ | 130.3 | $ | 161.5 | $ | 198.3 | $ | 243.1 | ||||||||||
Cost of Revenue |
$ | (28.0 | ) | $ | (37.2 | ) | $ | (46.3 | ) | $ | (57.0 | ) | $ | (70.1 | ) | |||||
Gross Profit |
$ | 70.2 | $ | 93.1 | $ | 115.2 | $ | 141.3 | $ | 173.0 | ||||||||||
Operating Expenses |
$ | (75.7 | ) | $ | (86.7 | ) | $ | (100.9 | ) | $ | (116.9 | ) | $ | (134.5 | ) | |||||
Income / (Loss) from Operations (GAAP) |
$ |
(5.5 |
) |
$ |
6.4 |
$ |
14.4 |
$ |
24.4 |
$ |
38.5 |
|||||||||
Other Royalty Income |
$ | 0.3 | $ | 0.3 | $ | 0.3 | $ | 0.3 | $ | 0.3 | ||||||||||
Adjusted EBIT (Non-GAAP) |
$ |
(5.2 |
) |
$ |
6.7 |
$ |
14.7 |
$ |
24.7 |
$ |
38.8 |
|||||||||
Income / (Loss) from Operations (GAAP) |
$ | (5.5 | ) | $ | 6.4 | $ | 14.4 | $ | 24.4 | $ | 38.5 | |||||||||
Other Royalty Income |
$ | 0.3 | $ | 0.3 | $ | 0.3 | $ | 0.3 | $ | 0.3 | ||||||||||
Adjusted EBIT (Non-GAAP) |
$ | (5.2 | ) | $ | 6.7 | $ | 14.7 | $ | 24.7 | $ | 38.8 | |||||||||
Depreciation & Amortization |
$ | 4.9 | $ | 4.0 | $ | 4.1 | $ | 4.2 | $ | 4.2 | ||||||||||
Stock Based Compensation Expense |
$ | 2.7 | $ | 2.5 | $ | 2.6 | $ | 2.6 | $ | 2.7 | ||||||||||
Adjusted EBITDA (Non-GAAP) |
$ |
2.3 |
$ |
13.2 |
$ |
21.3 |
$ |
31.5 |
$ |
45.7 |
• | all shares of Misonix common stock that are held in treasury by Misonix or are held directly by any direct or indirect subsidiary of Misonix, Bioventus or Merger Sub I immediately prior to the effective time will be cancelled and will cease to exist and no consideration will be paid or payable in respect thereof; |
• | except as described in the preceding bullet, each share of Misonix common stock that is issued and outstanding immediately prior to the effective time will be converted into the right to receive, at the election of the holder of such share, either (a) an amount of cash equal to $28, without interest (the “Cash Election Consideration”), or (b) 1.6839 validly issued, fully paid and non-assessable shares of Bioventus class A common stock (the “Stock Election Consideration”), based on the election of the holder thereof and subject to automatic proration and adjustment in accordance with the terms of the merger agreement as described below under “The Merger Agreement—The Mergers; Merger Consideration—Proration and Reallocation”; and |
• | each share of common stock, par value $0.0001 per share, of Merger Sub I that is issued and outstanding immediately prior to the effective time will be converted into one validly issued, fully paid |
and non-assessable share of common stock, par value $0.0001 per share, of Misonix as the surviving corporation. |
• | each share of common stock, par value $0.0001 per share, of Misonix that is issued and outstanding immediately prior to the Second Effective Time will be cancelled and will cease to exist. Each limited liability company interest of Merger Sub II issued and outstanding immediately prior to the Second Effective Time will remain outstanding as a limited liability interest of the surviving limited liability company. |
• | all stock election shares and all no election shares will be exchanged for 1.6839 shares of Bioventus class A common stock; and |
• | a portion of the cash election shares of each Misonix stockholder will be exchanged for $28.00 in cash as follows: cash election shares exchanged for $28.00 in cash = |
• | all cash election shares will be exchanged for the cash consideration; and |
• | all stock election shares and no election shares will be treated in the following manner: |
• | if the shortfall amount is less than or equal to the product of the aggregate number of no election shares and $28.00, which we refer to as the no election value, then (1) all stock election shares will be exchanged for 1.6839 shares of Bioventus class A common stock, and (2) a portion of the no election shares of each Misonix stockholder, calculated as follows, will be exchanged for $28.00 in cash as follows (and the remaining portion of such stockholder’s no election shares, if any, will be exchanged for 1.6839 shares of Bioventus class A common stock): |
• | if the shortfall amount is more than the no election value, then (1) all no election shares will be exchanged for $28.00 in cash and (2) a portion of the stock election shares of each stockholder will be exchanged for $28.00 in cash as follows (and the remaining portion of such stockholder’s stock election shares will be exchanged for 1.6839 shares of Bioventus class A common stock): |
• | a statement reflecting the number of whole shares of Bioventus class A common stock, if any, that such holder is entitled to receive pursuant to the merger agreement in non-certificated book-entry form in the name of such record holder; and |
• | a check, or wire transfer of immediately available funds (provided that such holder has provided wire transfer instructions and is entitled to cash in excess of $250,000), in the amount (after giving effect to any required tax withholdings as provided in the merger agreement) of (a) any applicable Cash Election Consideration, (b) any cash in lieu of fractional shares of Bioventus class A common stock plus (c) any unpaid cash dividends and any other dividends or other distributions that such holder has the right to receive pursuant to the merger agreement. |
• | the applicable Stock Election Consideration; and |
• | a check, or wire transfer of immediately available funds (provided that such holder has provided wire transfer instructions and is entitled to cash in excess of $250,000), in the amount (after giving effect to any required tax withholdings as provided in the merger agreement) of (a) any applicable Cash Election Consideration, (b) any cash in lieu of fractional shares of Bioventus class A common stock plus (c) any unpaid cash dividends and any other dividends or distributions that such holder has the right to receive pursuant to the merger agreement. The exchange agent will promptly cancel each such non-DTC book-entry share. |
• | the applicable Stock Election Consideration; and |
• | a check, or wire transfer of immediately available funds (provided that such holder has provided wire transfer instructions and is entitled to cash in excess of $250,000), in the amount (after giving effect to any required tax withholdings as provided in the merger agreement) of (a) any applicable Cash Election Consideration, (b) any cash in lieu of fractional shares of Bioventus Class A Common Stock plus (c) any unpaid cash dividends and any other dividends or distributions that such holder has the right to receive pursuant to the merger agreement. The exchange agent will promptly cancel each such non-DTC book-entry share. |
• | in the case of Misonix book-entry shares, written instructions authorizing the transfer of the Misonix book-entry shares are presented to the exchange agent; |
• | in the case of Misonix stock certificates, the Misonix stock certificates formerly representing such shares of Misonix common stock are surrendered to the exchange agent; and |
• | such Misonix stock certificates or Misonix book-entry shares are presented to the exchange agent accompanied by all documents required to evidence and effect such transfer and to evidence that any applicable transfer taxes have been paid or are not applicable, in each case, in form and substance reasonably satisfactory to Bioventus and the exchange agent. |
• | the date on which the holder surrenders such Misonix stock certificate or Misonix book-entry shares in accordance with the merger agreement; and |
• | the payment date for such dividend or distribution with respect to shares of Bioventus class A common stock (at which time such holder will be entitled, subject to the effect of applicable abandoned property, escheat or similar laws, to receive all such dividends and distributions, without interest). |
• | at the effective time, the certificate of incorporation of Misonix, as in effect immediately prior to the effective time, will continue to be the certificate of incorporation of the surviving corporation of the first merger until, subject to the terms of the merger agreement, thereafter changed or amended as provided therein or by applicable laws; |
• | the parties will take all requisite actions so that the limited liability company agreement of Merger Sub II will continue to be the limited liability company agreement of the Surviving Company until, subject to the terms of the merger agreement, thereafter changed or amended as provided therein or by applicable laws. |
• | organization, good standing and qualification to do business and subsidiaries’ organization, good standing and qualification to do business; |
• | capitalization; |
• | corporate authority and approval relating to the execution, delivery and performance of the merger agreement; |
• | the absence of any violation of organizational documents, any conflict with or violation of applicable laws, any violation of or default under contracts, or any lien on the properties, rights or assets of a party or its subsidiaries as a result of the execution and delivery of the merger agreement and completion of the mergers; |
• | the proper filing of reports, schedules, forms, documents and financial statements required by the SEC and compliance with certain provisions of the Sarbanes-Oxley Act; |
• | the maintenance of internal controls and procedures; |
• | the absence of undisclosed liabilities; |
• | the absence of certain material changes or events in the respective businesses of each of Bioventus and Misonix; |
• | compliance with applicable laws and the holding of necessary permits; |
• | investigations, litigations and proceedings; |
• | compliance with anti-corruption laws and regulations; |
• | tax matters; |
• | product defects and warranties; |
• | compliance with healthcare laws and regulations; |
• | the absence of any need for action by governmental authorities in order to complete the mergers, except as may be required by the Securities Act, the Exchange Act, the DGCL, the HSR Act or other applicable competition laws, applicable state securities takeover and “blue sky” laws or Nasdaq rules and regulations; |
• | the inapplicability of state anti-takeover statutes; |
• | opinions of financial advisors; |
• | broker’s and finder’s fees; and |
• | information provided by a party for inclusion in the Form S-4 (including the joint proxy statement/prospectus). |
• | Misonix’s required stockholder approval; |
• | intellectual property and information technology, including with respect to the enforceability of intellectual property, third-party intellectual property infringement claims, licensing arrangements, the protection of trade secrets, security breaches and compliance with privacy and security laws and regulations; |
• | personal property owned and leased and real property leased by Misonix; |
• | Misonix’s significant contracts and agreements; |
• | employee benefit plans and employment and labor practices; |
• | compliance with environmental laws and regulations; |
• | insurance policies; and |
• | the absence of ownership (as defined in Section 203(c) of the DGCL) of shares of Bioventus common stock by Misonix and its subsidiaries. |
• | each of Bioventus’s, merger sub I’s and merger sub II’s required stockholder approvals; |
• | intellectual property and information technology, including with respect to the enforceability of intellectual property and third-party intellectual property infringement claims; |
• | employee benefit plans and employment and labor practices; |
• | the absence of beneficial ownership of shares of Misonix common stock by Bioventus and its subsidiaries; |
• | debt financing related to merger sub I and merger sub II; |
• | data privacy and security; |
• | top customers, suppliers and distributors; and |
• | ownership or membership (as the case may be) and operation of merger sub I and merger sub II. |
• | general economic, political, business, financial or market conditions affecting the industry in which the party and its subsidiaries operate; |
• | a pandemic (including the continuation or worsening of the COVID-19 pandemic), epidemic, plague, or other outbreak of illness or public health event, hurricane, flood, tornado, earthquake or other natural disaster or act of God or changes resulting from weather conditions; |
• | changes in applicable laws or the interpretation thereof (including any measures related to the COVID-19 pandemic); |
• | changes in GAAP or any other applicable accounting standards or the interpretation thereof; |
• | geopolitical conditions, including trade and national security policies and export controls and executive orders relating thereto, any outbreak, continuation or escalation of any military conflict, declared or undeclared war, armed hostilities, or acts of foreign or domestic terrorism (including cyber-terrorism); |
• | a failure by the party or any of its subsidiaries to meet any internal or external projections or forecasts or any decline in stock price (excluding, in each case, the underlying causes of such failure or decline, as applicable, which may themselves constitute or be taken into account in determining whether there has been or would be a material adverse effect); |
• | the public announcement or pendency of the mergers and the other transactions contemplated by the merger agreement, including, in any such case, the impact thereof on relationships, contractual or otherwise, with customers, suppliers, distributors, business partners or employees (with certain limitations); |
• | any action expressly required to be taken by the party pursuant to the terms of the merger agreement or at the express written direction or consent of the other party; |
• | any claims, suits, actions or proceedings arising from allegations of breach of fiduciary duty or violation of applicable law or otherwise relating to the merger agreement or the transactions contemplated thereby; or |
• | any breach, violation or non-performance of any provision of the merger agreement by the party or any of its affiliates; provided, further, that any effect relating to or arising out of or resulting from any change or event referred to in the first five bullets above may constitute, and be taken into account in determining the occurrence of, a material adverse event if and only to the extent that such change or event has a disproportionate impact on the party and its subsidiaries as compared to other participants that operate in the industry in which the party and its subsidiaries operate. |
• | amend its or its subsidiaries’ organizational documents; |
• | split, combine, subdivide, change, exchange, amend the terms of or reclassify any shares of Misonix’s capital stock or other equity interests of Misonix or any of its subsidiaries; |
• | declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock or property) on any shares of its capital stock or the capital stock or equity interest of any subsidiary of Misonix, other than dividends or distributions only to the extent paid by any wholly owned subsidiary of Misonix to Misonix or another wholly owned subsidiary of Misonix. |
• | acquire (by merger, consolidation, operation of law, acquisition of stock, other equity interests or assets, formation of a joint venture or otherwise) (a) any other entity, (b) any equity interest in any other entity (other than investments in equity securities that constitute short term investments that are accounted for as cash equivalents), (c) any business or division or another entity, or (d) any material assets, except (i) acquisitions by Misonix from any of its wholly owned subsidiaries or among any of its wholly owned subsidiaries; (ii) the purchase of equipment, supplies and inventory in the ordinary course of business; and (iii) inbound licenses of intellectual property in the ordinary course of business; |
• | except in connection with any transaction between Misonix and any of its subsidiaries or among any of its subsidiaries, sell, assign, transfer, lease or license to any third party, or incur any lien on any of its material tangible property or tangible assets (except for certain permitted encumbrances), or otherwise dispose of (by merger, consolidation, operation of law, division or otherwise), any of Misonix’s intellectual property or material tangible assets, other than (a) sales of inventory, goods or services in the ordinary course of business in a manner consistent with past practice or of obsolete equipment or assets in the ordinary course of business consistent with past practice, (b) pursuant to written contracts |
or commitments existing as of the date of the merger agreement, (c) as security for any borrowings permitted by the merger agreement, or (d) licenses granted to customers or other third parties in the ordinary course of business consistent with past practice; |
• | incur (other than draws on existing revolving loans), redeem, repurchase, prepay (other than prepayments of revolving loans), defease or cancel or guarantee any indebtedness for borrowed money, issue or sell any debt securities or rights to acquire any debt securities (directly, contingently or otherwise) or make any loans or capital contributions, except for indebtedness among Misonix and its wholly owned subsidiaries (and guarantees by Misonix or its subsidiaries in respect thereof); |
• | (a) adopt, terminate or amend any Misonix employee benefit plan (except to the extent permitted in this paragraph below), (b) increase, or accelerate the vesting or payment of, the compensation or benefits of any member of the board of directors of Misonix, (c) grant any rights to severance, retention, change in control or termination pay to any member of the Misonix board, any current or former employee of Misonix or its subsidiaries, (d) hire or promote any employee at or to the level of Vice President or above, or (e) terminate the employment of any employee of Misonix or its subsidiaries whose annual base salary exceeds $100,000 (other than for cause), except, in each case, for (i) amendments to Misonix employee benefit plans determined by it in good faith to be required to comply with applicable laws, (ii) hiring any person for employment (including by means of internal promotion) to fill any currently existing Vice President or higher position that becomes vacant after the date of the merger agreement, and, notwithstanding anything to the contrary in the merger agreement, provide such person with compensation and benefits for such position consistent with past practice, (iii) hiring any person for employment in accordance with Misonix’s present hiring plan made available to Bioventus or otherwise hiring an individual below the level of Vice President in the ordinary course of business in a manner consistent with past practice, (iv) increases in compensation or benefits required pursuant to any Misonix employee benfit plan in effect on the date of the merger agreement, (v) increases to total target cash opportunities (i.e., annual base salary or wage rates and target annual cash bonus opportunities) in amounts that are in the ordinary course of business in a manner consistent with past practice, and (vi) any other actions set forth in Misonix’s disclosure schedule; |
• | except in the ordinary course of business, amend or terminate (except for terminations pursuant to the expiration of the existing term of any material contract or lease) certain material contracts or material property leases or waive, release or assign any materials rights under any material contracts or material property leases; |
• | make (except for elections made in the ordinary course of business), change or revoke any tax election, change any tax accounting period or method of tax accounting, amend any material tax return if such amendment would reasonably be expected to result in a material tax liability, settle or compromise any material liability for taxes or any tax audit, claim, or other proceeding relating to a material amount of taxes, enter into any agreement with a governmental entity relating to taxes if such agreement would reasonably be expected to result in a material tax liability, request any tax ruling from any governmental entity, surrender any right to claim a material refund of taxes, or, other than in the ordinary course of business, agree to an extension or waiver of the statute of limitations with respect to a material amount of taxes; |
• | other than consignment of Misonix products in the ordinary course of business, make any capital expenditure that is not contemplated by the capital expenditure budget set forth in Misonix’s disclosure schedule, unless such expenditures by Misonix and its subsidiaries do not, in the aggregate, exceed such budget by more than $200,000; |
• | settle or compromise any litigation, claim, suit, action or proceeding, except for (a) the payment, discharge or satisfaction, in the ordinary course of business in a manner consistent with past practice, of liabilities reflected or reserved against in the most recent balance sheet of Misonix, or (b) those that do not (i) impose any injunctive relief on Misonix or any of its subsidiaries, (ii) involve the payment of money greater than $250,000 in excess of existing insurance coverage, and (c) do not include an admission of liability or fault on the part of Misonix or any of its subsidiaries; |
• | materially reduce insurance coverage or fail to renew material existing insurance policies; |
• | (a) amend any permits in a manner that adversely impacts Misonix’s ability to conduct its business in any material respect or terminate or allow to lapse any material permits; |
• | except in connection with any transaction between Misonix and any of its wholly owned subsidiaries or among any of its wholly owned subsidiaries, issue, sell, grant or otherwise permit to become outstanding any additional shares of its capital stock or other equity interests, any securities convertible into or exchangeable for any such shares, or any options, warrants or rights to acquire any such shares, other than (a) shares of Misonix common stock issuable upon exercise of Misonix outstanding stock options or the vesting of Misonix RSUs, or (b) pursuant to the ESPP and (to the extent not already covered), Misonix’s equity incentive plans, in the ordinary course of business consistent with past practice and in accordance with the merger agreement’s terms; |
• | directly or indirectly repurchase, redeem or otherwise acquire any shares of Misonix’s or any of its subsidiaries’ capital stock or equity interests, or any other securities or obligations convertible (currently or after the passage of time or the occurrence of certain events) into or exchangeable for any shares of Misonix’s or any of its subsidiaries’ capital stock or equity interests, except (a) shares of Misonix common stock repurchased from employees or consultants or former employees or consultants pursuant to the exercise of repurchase rights existing prior to the date of the merger agreement, or (b) shares of Misonix common stock accepted as payment for the exercise price of options to purchase Misonix common stock pursuant to Misonix’s stock incentive plan or for withholding taxes incurred in connection with the exercise, vesting or settlement of Misonix stock options or Misonix RSUs, as applicable, in accordance with the terms of the applicable award; |
• | change any methods of financial accounting or accounting practices in any material respect other than as required by changes in GAAP; |
• | enter into any contract or agreement that would constitute a material contract or material property lease; |
• | except as expressly required by applicable law or Misonix’s organizational documents, convene (a) any special meeting of Misonix stockholders, other than the Misonix special meeting to be held in connection with the transactions contemplated by the merger agreement, or (b) any other meeting of Misonix stockholders to consider a proposal that would reasonably be expected to impair, prevent or delay the transactions contemplated by the merger agreement; |
• | enter into any agreement, understanding or arrangement with respect to the voting of any of Misonix’s capital stock or other equity interests (including any voting trust), other than with respect to awards under Misonix’s equity plans otherwise permitted under the merger agreement or in connection with the granting of revocable proxies in connection with any meeting of Misonix stockholders; |
• | adopt a plan of (a) complete or partial liquidation of Misonix or any of its subsidiaries or (b) dissolution, merger, consolidation, division, restructuring, recapitalization or other reorganization, other than, in the case of clause (b), transactions between Misonix’s wholly owned subsidiaries; |
• | fail to make any issuance, renewal, maintenance and other payments that become due with respect to any of Misonix’s material registered intellectual property or otherwise abandon, cancel or permit to lapse any material Misonix’s material registered intellectual property, other than in its reasonable business judgment or in the ordinary course of business consistent with past practice, or authorize the disclosure to any third party of any material trade secret in a way that results in loss of trade secret protection, other than in the ordinary course of business consistent with past practice; or |
• | authorize, approve, enter or commit to do any of the foregoing. |
• | amend its, merger sub I’s or merger sub II’s organizational documents in a manner that would be adverse in any material respect to the holders of Misonix common stock (after giving effect to the mergers); |
• | split, combine, subdivide, change, exchange, amend the terms of or reclassify any shares of Bioventus’s capital stock or other equity interests, except for any such transaction involving only wholly owned subsidiaries of Bioventus; |
• | declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock or property) on any shares of its capital stock, except dividends or distributions may be paid by any wholly owned subsidiary of Bioventus to Bioventus or to another wholly owned subsidiary of Bioventus; |
• | acquire (by merger, consolidation, operation of law, acquisition of stock, other equity interests or assets, formation of a joint venture or otherwise) (a) any other entity, (b) any equity interest in any other entity (other than investments in equity securities that constitute short term investments that are accounted for as cash equivalents), (c) any business or division or another entity; (d) any assets material to Misonix and subsidiaries of Misonix, taken as a whole, except in each case, (i) acquisitions by Bioventus from any of its wholly owned subsidiaries or among any of its wholly owned subsidiaries, (ii) the purchase of equipment, supplies and inventory in the ordinary course of business, (iii) inbound licenses of intellectual property in the ordinary course of business, or (iv) acquisitions that in each case would not reasonably be expected to (1) result in the holders of Misonix common stock having different rights and privileges than holders of Bioventus class A common stock following the consummation of the mergers, (2) materially delay, materially imped or prevent the consummation of the transactions contemplated by the merger agreement or (3) result in the failure of any of the conditions to closing set forth in the merger agreement to be satisfied prior to the end date; |
• | liquidate (completely or partially), dissolve or adopt a plan or resolution providing for any of the foregoing, in each case, with respect to Bioventus, merger sub I or merger sub II; or |
• | authorize, approve, enter or commit to do any of the foregoing. |
• | solicit, initiate, knowingly encourage, knowingly induce, knowingly assist or knowingly facilitate any inquiries regarding, or the submission or announcement by any person (other than, in the case of Misonix, Bioventus or in the case of Bioventus, Misonix, or its respective affiliates and representatives) of, any proposal or offer that constitutes, or would reasonably be expected to lead to, an acquisition proposal (as defined below) (provided, however, that Bioventus or Misonix, as applicable, receiving such acquisition proposal, and its representatives, may refer the person making such proposal or offer to the provisions of the merger agreement and make inquiries of a person making an acquisition proposal involving such party (and its representatives) to solely clarify the terms of such acquisition proposal for the purpose of the Bioventus board or the Misonix board, as applicable, informing itself about such acquisition proposal); |
• | furnish any information regarding Bioventus or Misonix, as applicable, receiving such acquisition proposal, or of its subsidiaries (other than to the other party and its subsidiaries), or afford access to such party’s or its subsidiaries’ representatives, books, records or property, in each case, in connection with or for the purpose of soliciting, initiating, encouraging or facilitating, or in response to, any inquiry, proposal or offer that constitutes or would reasonably be expected to lead to an acquisition proposal; |
• | engage in, enter into, continue or otherwise participate in any discussions or negotiations with any person (other than, in the case of Bioventus, Misonix, or in the case of Misonix, Bioventus, or its respective representatives) with respect to any acquisition proposal or any inquiry, proposal or offer that would reasonably be expected to lead to an acquisition proposal (provided, however, that each party and its representatives may refer the person making such proposal or offer to the provisions of the merger agreement and make inquiries of a person making such acquisition proposal to solely clarify the terms of such acquisition proposal for the purpose of the Bioventus board or the Misonix board, as applicable, informing itself about such acquisition proposal); |
• | approve, adopt, recommend, agree to or enter into, or publicly propose to approve, adopt, recommend, agree to or enter into, any letter of intent, memorandum of understanding or similar document, agreement, commitment, or agreement in principle with respect to any acquisition proposal; or |
• | resolve or agree to do any of the foregoing; provided, however, that, notwithstanding anything to the contrary contained in the merger agreement, prior to obtaining the applicable required stockholder approval, Bioventus and Misonix, as applicable, and its respective representatives may engage or otherwise participate in discussions or negotiations with, and provide information to, any person (including its representatives and financing sources and their representatives) that has made a bona fide written acquisition proposal after the date of the merger agreement that did not result from any breach of the foregoing restrictions by Bioventus or Misonix, their subsidiaries, or any of their representatives, if: |
• | any merger, consolidation, amalgamation, business combination, joint venture, reorganization or other similar transaction involving Bioventus or Misonix, as applicable; |
• | any transaction (i) in which any person or “group” (as defined in the Exchange Act) of persons acquires beneficial or record ownership of securities (or instruments convertible into or exercisable or exchangeable for, such securities) representing 20% or more of the outstanding voting power of Bioventus or Misonix, as applicable; or (ii) in which Bioventus or Misonix, as applicable, or any of its subsidiaries issues securities (or instruments convertible into or exercisable or exchangeable for, such securities) representing 20% or more of the outstanding voting power of Bioventus or Misonix, as applicable (after giving effect to such transaction);; |
• | any sale, exchange, transfer, acquisition or disposition of 20% or more of the consolidated assets (including equity securities of respective subsidiaries) Bioventus and its subsidiaries, or of Misonix and its subsidiaries, as applicable, taken as a whole, or of any business or businesses (or the assets of any business or businesses, including equity securities of any subsidiary of Bioventus or Misonix, as applicable) that constitute or account for 20% or more of the consolidated net revenues or net income of Bioventus and its subsidiaries, or of Misonix and its subsidiaries, as applicable, taken as a whole; |
• | any tender offer or exchange offer that if consummated would result in any person or “group” (as defined in the Exchange Act) of persons acquiring beneficial or record ownership of securities (or instruments convertible into or exercisable or exchangeable for such securities) representing 20% or more of the voting power of Bioventus or Misonix, as applicable; or |
• | any combination of the foregoing types of transactions if the sum of the percentage of the voting power of Bioventus or Misonix, as applicable, or of the consolidated net revenues, net income or assets of Bioventus and its subsidiaries or of Misonix and its subsidiaries, as applicable, taken as a whole, involved is 20% or more. |
• | withhold, withdraw, modify, amend or qualify (or publicly propose to do so), in a manner adverse to Bioventus, Merger Sub I and Merger Sub II, on the one hand, or to Misonix, on the other hand, the Misonix board’s required recommendation to Misonix stockholders to adopt the merger agreement, which is referred to as the “Misonix recommendation”, or the Bioventus board’s required recommendation to Bioventus stockholders to approve the share issuance, which is referred to as the “Bioventus recommendation”, as applicable or fail to include the Misonix recommendation or Bioventus recommendation, as applicable, in the joint proxy statement/prospectus; |
• | approve, recommend or declare advisable (or publicly propose to do so) any acquisition proposal; |
• | fail to publicly announce, within ten business days after a tender offer or exchange offer relating to the equity securities of Bioventus or Misonix, as applicable, have been commenced by any third party (and in no event later than one business day prior to the date of the Misonix special meeting or the Bioventus special meeting, as applicable, as either may be postponed or adjourned pursuant to this merger agreement), a statement disclosing that the Misonix board or the Bioventus board, as applicable, recommends rejection of such tender or exchange offer (for the avoidance of doubt, the taking of no position or a neutral position in respect of the acceptance of any such tender offer or exchange offer as of the end of such period will constitute a failure to publicly announce that such board of directors recommends rejection of such tender or exchange offer); |
• | if requested by the other party, fail to issue, within ten business days after an acquisition proposal is publicly announced (and in no event later than one business day prior to the date of the Misonix special meeting or the Bioventus special meeting, as applicable, as it may be postponed or adjourned pursuant |
to the merger agreement), a press release reaffirming the Misonix recommendation or the Bioventus recommendation, as applicable, provided, further, that in no event will Misonix or Bioventus, as applicable, or its board of directors, be obligated to publicly reaffirm the Misonix recommendation or the Bioventus recommendation, as applicable, on more than one occasion with respect to each such publicly announced acquisition proposal or on more than one occasion with respect to each publicly announced material modification thereof (any action described in the foregoing being referred to as a “change in recommendation”); |
• | cause or permit Bioventus or Misonix, as the case may be, to enter into any contract, letter of intent, memorandum of understanding, agreement in principle or other arrangement or understanding (other than a confidentiality agreement entered into in compliance with the merger agreement) contemplating or relating to an acquisition transaction; |
• | take any action to make the provisions of any anti-takeover or similar statute or regulation inapplicable to any acquisition proposal or counterparty thereto; or |
• | publicly propose to do any of the foregoing. |
• | the recipient’s board of directors determines in good faith, after consultation with its outside legal counsel and financial advisor, that such acquisition proposal constitutes a superior proposal and that failure to take such action would reasonably be expected to be inconsistent with the recipient’s board of directors’ fiduciary duties to its stockholders under applicable laws; |
• | the recipient delivers to the other party a written notice at least four business days in advance stating that the recipient’s board of directors intends to make a change of recommendation, which notice must include the identity of the person making such acquisition proposal and a copy of such proposal and a draft of the definitive agreement to be entered into in connection therewith (or, if not in writing, the material terms and conditions thereof); |
• | during such four business day period, if requested by the other party, the recipient engages in good faith negotiations with the other party regarding a possible amendment of the merger agreement so that the acquisition proposal that is the subject of the notice regarding a superior proposal ceases to be a superior proposal; and |
• | after the expiration of the negotiation period described above and in a manner that would be binding upon Misonix, on the one hand, and Bioventus, Merger Sub I and Merger Sub II on the other, as applicable, if accepted by the other party, the Misonix board or the Bioventus board, as applicable, determines in good faith, after consultation with its outside legal counsel and financial advisor, after taking into account any amendments to the merger agreement that the other party has committed in writing to make as a result of the negotiations contemplated above, that such acquisition proposal continues to constitute a superior proposal, provided, that if there is any change to any of the financial terms or any other material terms of such acquisition proposal, the acquisition proposal’s recipient will, in each case, be required to deliver to the other party an additional notice consistent with that described above and a new negotiation period consistent with that described above will commence (except that the original four business day notice period referred to above must instead be equal to the longer of (i) |
11:59 p.m. New York City time on the second business day immediately following the receiving party’s receipt of such notice, and (ii) the period remaining under the original four business day notice period above), during which time Misonix or Bioventus, as applicable, will be required to comply with the requirements of the merger agreement anew with respect to such additional notice (but substituting the time periods therein with the foregoing two business day period). The actions of the applicable board of directors making a determination that an acquisition proposal constitutes a superior proposal and its authorizing and providing the notices to the other party required by the merger agreement will not in and of itself, constitute a change in recommendation or a violation of the merger agreement. |
• | the Misonix board or the Bioventus board, as applicable, determines in good faith, after consultation with its outside legal counsel and financial advisor, that, in light of such intervening event, a failure to effect a change of recommendation would reasonably be expected to be inconsistent with such board of directors’ fiduciary duties to Misonix or Bioventus, as applicable, and its stockholders under applicable laws; |
• | less than four business days prior to the making of such change in recommendation, Misonix or Bioventus, as applicable, receives a written notice from the other party confirming that the applicable board of directors intends to effect such change in recommendation, specifying the reasons therefor in reasonable detail; |
• | during such four business day period, if requested by the other party, the party experiencing the intervening event engages in good faith negotiations with the other party to amend the merger agreement in such a way that obviates the need for the applicable board of directors to effect a change of recommendation; and |
• | after the expiration of such four business day period, the board of directors of the party experiencing the intervening event determines in good faith, after consultation with its outside legal counsel and financial advisor and after taking into account any amendments to the merger agreement that the other party has committed in writing to make a result of such negotiations contemplated by the clause above and in a manner that would be binding on such other party if accepted by the party experiencing the intervening event, that in light of such intervening event, a failure to effect a change of recommendation would reasonably be expected to be inconsistent with such board of directors’ fiduciary duties to its stockholders under applicable laws, even if such changes committed to in writing were to be given effect. |
• | an acquisition proposal or a superior proposal or any inquiry or communications relating thereto, any matter relating thereto or consequences thereof; |
• | in each case in and of itself, any changes in the market price or trading volume of the Bioventus class A common stock or Misonix common stock, as applicable, or the fact that Bioventus or Misonix, as applicable, meets, fails to meet or exceeds any internal or published projections, forecasts or estimates of its revenue, earnings or other financial performance or results of operations for any period (except that any underlying cause of any of the foregoing may be taken into account unless excluded pursuant the other bullet points); or |
• | any event, condition or circumstance related to Bioventus and any of its subsidiaries or Misonix and any of its subsidiaries, as applicable. |
• | to the extent reasonably necessary to ensure that any supplement or amendment to this joint proxy statement/prospectus which the Bioventus board or the Misonix board, as applicable, has determined in good faith, after consultation with the other party and its outside counsel, is required by applicable law is disclosed to Bioventus or Misonix stockholders, as applicable, and promptly disseminated to such stockholders within a reasonable amount of time (as determined by such board of directors in good faith after consultation with its outside counsel) prior to the applicable special meeting; |
• | if required by applicable law or a request from the SEC or its staff; or |
• | if, as of the time for which the Bioventus special meeting or the Misonix special meeting, as applicable, is scheduled, there are insufficient shares of Bioventus class A common stock or Misonix common stock, as applicable, represented (either in person or by proxy) to constitute a quorum necessary to conduct the business to be conducted at such special meeting. |
• | each of Bioventus and Misonix may make public announcements concerning the merger agreement or the merger that consist solely of information previously disclosed in previous public announcements, statements or other disclosures made by Bioventus and/or Misonix in compliance with the publicity provisions of the merger agreement; |
• | each of Bioventus and Misonix may make any public statements in response to questions by the press, analysts, investors or those participating in investor calls or industry conferences, so long as such public statements consist solely of information previously disclosed in previous press releases, public disclosures or public statements made by Bioventus and/or Misonix in compliance with the publicity provisions of the merger agreement; |
• | Misonix need not consult with Bioventus in connection with any public announcement or statement to be made with respect to any acquisition proposal; and |
• | Bioventus and Misonix need not consult with the other party in connection with any public announcement or, statement to be made with respect to any change of recommendation. |
• | Bioventus and Misonix as the surviving limited liability company must indemnify and hold harmless, and provide advancement of expenses to, all current or former directors and officers of Misonix or any of its subsidiaries, any person who becomes a director or officer of Misonix or any of its subsidiaries prior to the effective time and any current or former director of officer of Misonix or any of its subsidiaries who is, was or at any time prior to the effective time does serve as a director, officer, member, trustee or fiduciary of another corporation, partnership joint venture, trust, pension plan or employee benefit plan at the request of or for the benefit of Misonix or any of its subsidiaries (which individuals are referred to as the “indemnified parties”) to the fullest extent permitted by applicable laws; and |
• | Misonix as the surviving limited liability company must maintain in effect the provisions in the organizational documents of Misonix and each of its subsidiaries and other agreements of Misonix or any of its subsidiaries with any indemnified party, in each case, regarding exculpation, elimination or limitation of liability, indemnification of officers, and directors or other fiduciaries and advancement of expenses that are in existence on the date of the merger agreement (including acts or omissions in connection with the approval of the merger agreement and the consummation of the mergers and the related transactions) and set forth in Misonix’s disclosure schedule, and no such provision may be amended, modified or repealed in any manner that would adversely affect the rights or protections thereunder of any such indemnified party in respect of acts or omissions occurring or alleged to have occurred at or prior to the effective time without the consent of such indemnified party. |
• | furnish to Bioventus certain customary financial information with respect to the Misonix and its subsidiaries as is necessary for Bioventus to prepare the customary bank information memoranda, lender presentations, rating agency presentations and other similar customary documents, and to assist Bioventus in the preparation thereof; |
• | provide Bioventus with requested information that is required in connection with the financing by U.S. regulatory authorities under applicable “know-your-customer” and anti-money laundering rules and regulations; |
• | deliver, or cause the applicable Company Subsidiary to deliver, necessary prepayment and/or termination notices in accordance with the terms of each of existing credit facilities of Misonix and its subsidiaries; |
• | execute and deliver credit agreements and to reasonably facilitate the pledging of collateral and the provision of guarantees in respect of the financing; and |
• | cause members of the senior management of Misonix and its representatives and advisors to participate in meetings, conference calls, roadshows and presentations with prospective lenders and investors. |
• | maintain the effect of the debt commitment letter; |
• | negotiate definitive financing agreements on the terms set forth in the debt commitment letter; and |
• | satisfy the conditions in the debt commitment letter on a timely basis and consummate the financing contemplated thereby. |
• | the registration statement on Form S-4 of which this joint proxy statement/prospectus forms a part must have become effective in accordance with the provisions of the Securities Act, no stop order may have been issued by the SEC and remain in effect with respect to the Form S-4 and no proceedings for that purpose may have been commenced or threatened in writing by the SEC and not withdrawn; |
• | approval by Misonix stockholders of the Misonix merger proposal must have been obtained; |
• | approval by Bioventus stockholders of the Bioventus share issuance proposal must have been obtained; |
• | any waiting period (or any agreed upon extension of any waiting period or commitment not to consummate the mergers for any period of time) applicable to the consummation of the mergers under the HSR Act must have expired or been terminated by the relevant governmental entity, and there must be no pending agreement between Bioventus and any governmental entity not to close; |
• | the shares of Bioventus class A common stock to be issued pursuant to the first merger, including the shares of Bioventus class A common stock to be issued upon the exercise of converted Misonix stock options and upon vesting of converted Misonix RSUs, must have been approved for listing (subject to notice of issuance) on Nasdaq; and |
• | no law or order preventing, enjoining or making illegal the consummation of the mergers may have been entered, issued or adopted by any court of competent jurisdiction or other governmental entity of competent jurisdiction and remain in effect (any such law or order is referred to as a “relevant legal restraint”). |
• | Misonix’s representations and warranties regarding the numbers of its issued, reserved for issuance and/or outstanding capital stock or other equity interests must have been true and accurate, other than de minimis inaccuracies, at and as of the date of the merger agreement, and must be true and accurate, other than de minimis inaccuracies, at and as of the closing date as if made at and as of such time (except to the extent that any such representation and warranty expressly speaks as of a particular date or period of time, in which case such representation and warranty will only be required to be true and accurate, other than de minimis inaccuracies, as of such particular date or period of time); |
• | Misonix’s representations and warranties regarding (a) Misonix’s organization and good standing, (b) capitalization (other than regarding its capital stock as described in the preceding bullet), (c) corporate authority and approval, (d) Misonix’s required stockholder approval, (e) non-violation of Misonix’s or its subsidiaries’ organizational documents, (f) takeover statutes and (g) any broker, finder or investment banker fees must have been true and accurate in all material respects at and as of the date of the merger agreement and must be true and accurate in all material respects at and as of the closing date as if made at and as of such time (except to the extent that any such representation and warranty expressly speaks as of a particular date or period of time, in which case such representation and warranty will only be required to be so true and accurate in all material respects as of such particular date or period of time), without giving effect to any materiality or material adverse effect qualifications contained therein; |
• | Misonix’s remaining representations and warranties must have been true and accurate in all respects at and as of the date of the merger agreement and must be true and accurate in all respects at and as of the closing date as if made at and as of such time (except to the extent that any such representation and warranty expressly speaks as of a particular date or period of time, in which case such representation and warranty will only be required to be so true and accurate as of such particular date or period of time), except as, individually or in the aggregate has not constituted or resulted in or would not reasonably be expected to constitute or result in, a material adverse effect, without giving effect to any materiality or material adverse effect qualifications contained therein (provided, that if there has been, from the date of the most recent company balance sheet provided by Misonix to Bioventus pursuant to the merger agreement through the date of the merger agreement, any fact, event, change, effect, circumstance, occurrence or development that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect to Misonix, such fact, event, change, effect circumstance, occurrence or development will be given effect); |
• | Misonix’s covenants required to be complied with or performed at or prior to the closing must have been complied with and performed in all material respects; |
• | since the date of the merger agreement, there must not have occurred any effects that, individually or in the aggregate, have constituted or resulted in, or would reasonably be expected to constitute or result in, a material adverse effect for Misonix; and |
• | Bioventus must have received a certificate, dated as of the closing date and executed by the Chief Executive Officer or Chief Financial Officer of Misonix, confirming that the conditions described in the preceding five bullets have been satisfied. |
• | Bioventus’ representations and warranties regarding the numbers of its issued, reserved for issuance and/or outstanding capital stock or other equity interests must have been true and accurate, other than de minimis inaccuracies, at and as of the date of the merger agreement and must be true and accurate, other than de minimis inaccuracies, at and as of the closing date as if made at and as of such time (except to the extent that any such representation and warranty expressly speaks as of a particular date or period of time, in which case such representation and warranty will only be required to be true and accurate, other than de minimis inaccuracies, as of such particular date or period of time); |
• | Bioventus’ representations and warranties regarding (a) Bioventus’, Merger Sub I’s and Merger Sub II’s organization and good standing, (b) capitalization (other than regarding its capital stock as described in the preceding bullet), (c) corporate authority and approval, (d) Bioventus’ required stockholder approval, (e) non-violation of Bioventus’ or its subsidiaries’ organizational documents and (e) any broker, finder or investment banker fees must have been true and accurate in all material respects at and as of the date of the merger agreement and will only be required to be true and accurate in all material respects at and as of the closing date as if made at and as of such time (except to the extent that any such representation and warranty expressly speaks as of a particular date or period of time, in which case such representation and warranty will only be required to be so true and accurate in all material respects as of such particular date or period of time), without giving effect to any materiality or material adverse effect qualifications contained therein; |
• | Bioventus’ remaining representations and warranties must have been true and accurate in all respects at and as of the date of the merger agreement and will only be required to be true and accurate in all respects at and as of the closing date as if made at and as of such time (except to the extent that any such representation and warranty expressly speaks as of a particular date or period of time, in which case such representation and warranty must be so true and accurate in all respects as of such particular date or period of time), except as, individually or in the aggregate, has not constituted or resulted in or would not reasonably be expected to constitute or result in, a material adverse effect, without giving effect to any materiality or material adverse effect qualifications contained therein (provided, that if there has been, from the date of the most recent company balance sheet provided by Bioventus to Misonix pursuant to the merger agreement through the date of the merger agreement, any fact, event, change, effect, circumstance, occurrence or development that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect to Misonix, such fact, event, change, effect circumstance, occurrence or development will be given effect); |
• | Bioventus’ covenants required to be complied with or performed at or prior to the effective time must have been complied with and performed in all material respects; |
• | since the date of the merger agreement, there must not have occurred any effects that, individually or in the aggregate, have constituted or resulted in, or would reasonably be expected to constitute or result in, a material adverse effect for Bioventus; |
• | Misonix must have received a certificate, dated as of the closing date and executed by the Chief Executive Officer or Chief Financial Officer of Bioventus, confirming that the conditions described in the preceding five bullets have been satisfied; and |
• | Misonix must have received an opinion from Jones Day or other nationally recognized tax counsel reasonably acceptable to Misonix, dated as of the closing date, to the effect that the mergers qualify for a “reorganization” within the meaning of Section 368(a) of the Code at a level of comfort at least equivalent to the corresponding tax opinion provided by such tax opinion counsel in the registration statement contained in Form S-4. |
• | by mutual written consent of Bioventus and Misonix at any time prior to the effective time; |
• | by either Bioventus or Misonix, if the merger has not been consummated at or prior to 11:59 p.m. New York City time on January 31, 2022, which is referred to as the “end date” (however, if all of the conditions to closing have been satisfied or waived or are capable of being satisfied at the relevant time other than any conditions to closing that cannot be satisfied or waived due to a relevant legal restraint involving antitrust laws, the end date will be automatically extended to 11:59 p.m. on March 31, 2022), provided, that a party will not be permitted to terminate the merger agreement pursuant to this provision if the material breach by such party (or any affiliate of such party) of any of such party’s obligation under the merger agreement will have materially contributed to the failure of the closing to have occurred on or before the end date; |
• | by either Bioventus or Misonix at any time prior to the effective time if a relevant legal restraint permanently preventing, enjoining or making illegal the consummation of the mergers will have become final and non-appealable; provided, that the party seeking to terminate the merger agreement will have used reasonable best efforts to prevent the entry of and to remove such relevant legal restraint in accordance with the merger agreement; |
• | by Bioventus at any time prior to Misonix obtaining its required stockholder approval, if the Misonix board has made a change in recommendation or Misonix has willfully breached in any material respect the covenants applicable to it regarding non-solicitation, special meetings and changes in recommendation; |
• | by Misonix at any time prior to Bioventus obtaining its required stockholder approval, if (a) the Bioventus board has made a change in recommendation, (b) Bioventus has willfully breached in any material respect the covenants applicable to it regarding non-solicitation, special meetings and changes in recommendation or (c) if Bioventus has materially breached its representations and warranties regarding financing and solvency under the merger agreement or its covenants regarding financing and financing cooperation under the merger agreement (collectively referred to as the “financing requirements”) and (i) any such breach of the financing requirements is not cured by the earlier of the end date or prior to the twentieth business day after Misonix gives written notice of such breach to Bioventus, (ii) all of the conditions, the satisfaction or waiver of which would be necessary to trigger the obligation of Bioventus to consummate the mergers (not including the condition related to the certificate to be provided by Misonix), have been satisfied and continue to be satisfied (other than those conditions that by their nature cannot be satisfied other than at the closing), (iii) Misonix has irrevocably committed in a written notice delivered to Bioventus following the expiration of the cure period specified above that Misonix is ready, willing and able to consummate the transactions contemplated by the merger agreement; provided, however, that, with respect to such conditions and Misonix’s readiness, willingness and ability to consummate the transactions contemplated by the merger agreement, any such condition will be deemed satisfied if the failure of such condition resulted primarily from (1) any action or inaction by Bioventus, Merger Sub I or Merger Sub II, or (2) Bioventus’ breach of the financing requirements, and (iv) Bioventus, Merger Sub I or Merger Sub II fails to consummate the transactions contemplated by the merger agreement by the earlier of the end date or within two business days following the written notice delivered by Misonix to Bioventus following the expiration of the cure period specified above; |
• | by Misonix, if prior to obtaining its required stockholder approval, (a) the Misonix board will have authorized Misonix to enter into a definitive agreement relating to a superior proposal in material compliance with the merger agreement and (b) substantially concurrently with the termination of the merger agreement, Misonix enters into the definitive agreement relating to a superior proposal and pays Bioventus the applicable termination fee pursuant to the merger agreement; |
• | by either Bioventus or Misonix, if the approval by Misonix stockholders of the Misonix merger proposal has not been obtained after a vote on approval of such proposal has been taken at the Misonix special meeting (including any postponement or adjournment thereof); |
• | by either Bioventus or Misonix, if the approval by Bioventus stockholders of the Bioventus share issuance proposal has not been obtained after a vote on approval of such proposal has been taken at the Bioventus special meeting (including any postponement or adjournment thereof); |
• | by Bioventus (i) if any of Misonix’s representations and warranties contained in the merger agreement are inaccurate such that the conditions to closing would not be satisfied or (ii) if Misonix has breached any covenant in the merger agreement and such breach (a) would result in the failure of a condition to closing, provided, that if an inaccuracy in any of Misonix’s representations and warranties or a breach of a covenant of Misonix is curable by Misonix by the end date and Misonix is continuing to exercise its reasonable best efforts to cure such inaccuracy or breach, then Bioventus may not terminate the merger agreement under this paragraph on account of such inaccuracy or breach unless such inaccuracy or breach remains uncured for a period of thirty business days commencing on the date that Misonix receives written notice of such inaccuracy or breach from Bioventus; provided, further, that Bioventus will not have the right to terminate the merger agreement pursuant to this paragraph if Bioventus is then in breach of any of its representations, warranties or agreements contained in the merger agreement, which breach would give rise to the failure of a condition to closing; or |
• | by Misonix if: (i) any of Bioventus’, Merger Sub I’s or Merger Sub II’s representations and warranties contained in the merger agreement are inaccurate such that the conditions to closing would not be satisfied; or (ii) any of Bioventus’ covenants contained in the merger agreement will have been breached such that the conditions to closing would not be satisfied; provided, however, that for purposes of clauses (i) and (ii) above, if an inaccuracy in any of Bioventus’, Merger Sub I’s or Merger Sub II’s representations and warranties or a breach of a covenant of Bioventus is curable by Bioventus by the end date and Bioventus is continuing to exercise its reasonable best efforts to cure such inaccuracy or breach, then Misonix may not terminate the merger agreement under this paragraph on account of such inaccuracy or breach unless such inaccuracy or breach remains uncured for a period of thirty business days commencing on the date that Bioventus receives written notice of such inaccuracy or breach from Misonix; provided, further, that Misonix will not have the right to terminate the merger agreement pursuant to this paragraph if Misonix is then in breach of any of its representations, warranties or agreements contained in the merger agreement, which breach would give rise to the failure of a condition to closing. |
• | (a) by Misonix if prior to obtaining its required stockholder approval, (i) the Misonix board has authorized Misonix to enter into a definitive agreement relating to a superior proposal and (ii) substantially concurrently with the termination of the merger agreement, Misonix enters into the definitive agreement relating to a superior proposal, (b) by Bioventus at any time prior to Misonix obtaining its required stockholder approval, if the Misonix board has made a change in recommendation or Misonix has willfully breached in any material respect any covenant applicable to |
it regarding non-solicitation, special meetings and changes in recommendation, or (c) by either Bioventus or Misonix (x) if the merger has not been consummated on or prior 11:59 p.m. New York City time on the end date and at the end date all of the conditions to Misonix’s obligations to consummate the transactions other than receipt of its required stockholder approval have been satisfied, or are capable of satisfaction had the closing occurred on the end date, or (y) due to the failure of Misonix to obtain approval by Misonix stockholders of the Misonix merger proposal, in each of the previous cases under (c) above, at a time when Bioventus would have been entitled to terminate the merger agreement pursuant to (b) above; and |
• | (a) by either Bioventus or Misonix, if the approval by Misonix stockholders of the Misonix merger proposal has not been obtained after a vote on approval of such proposal has been taken at the Misonix special meeting, (b) by Bioventus (i) if any of Misonix’s representations and warranties contained in the merger agreement are inaccurate such that the conditions to closing would not be satisfied or (ii) if Misonix has breached any covenant in the merger agreement and such breach would result in the failure of a condition to closing, or (c) by either Bioventus or Misonix, if the merger has not been consummated on or prior 11:59 p.m. New York City time on the end date and at the end date all of the conditions to Misonix’s obligations to consummate the transactions other than receipt of its required stockholder approval have been satisfied, or are capable of satisfaction had the closing occurred on the end date, at a time when the merger agreement could have been terminated pursuant to (a) or (b) above, and: (x) at or prior to the Misonix special meeting (in the case of a termination pursuant to (a) above), or at or prior to the time of the applicable breach by Misonix (in the case of a termination pursuant to (b) above), any person must have publicly announced an intention to make an acquisition proposal involving Misonix, or such an acquisition proposal must have been publicly disclosed, publicly announced, commenced, submitted or made and must not have been publicly withdrawn without qualification at least five business days prior to the date of the Misonix special meeting, in the case of a termination pursuant to (a) above, or the time of such breach, in the case of a termination pursuant to (b) above; and (ii) on or prior to the date that is twelve months following the termination of the merger agreement, either (A) an acquisition transaction involving Misonix is consummated or (B) a definitive agreement relating to such an acquisition transaction is entered into by Misonix and the transaction contemplated thereby is subsequently consummated (it being understood that, for purposes of this clause (B), each reference to 20% in the definition of “acquisition transaction” above will be deemed to be a reference to 50%). |
• | (a) by Misonix at any time prior to Bioventus obtaining its required stockholder approval, if (i) the Bioventus board has made a change in recommendation, (ii) Bioventus has willfully breached in any material respect the covenants applicable to it regarding non-solicitation, special meetings and changes in recommendation or (iii) if Bioventus has materially breached the financing requirements, (b) by either Bioventus or Misonix (x) if the merger has not been consummated on or prior to close of business on the end date or (y) if the approval by Bioventus stockholders of the Bioventus share issuance proposal has not been obtained after a vote on approval of such proposal has been taken at the Bioventus special meeting, in each of the previous cases under (b) above, at a time when Misonix would have been entitled to terminate the merger agreement pursuant to (a) above; and |
• | (a) by either Bioventus or Misonix, if the approval by Bioventus stockholders of the Bioventus share issuance proposal has not been obtained after a vote on approval of such proposal has been taken at the |
Bioventus special meeting, (b) by Misonix if: (i) any of Bioventus’, Merger Sub I’s or Merger Sub II’s representations and warranties contained in the merger agreement are inaccurate such that the conditions to closing would not be satisfied; or (ii) any of Bioventus’ covenants contained in the merger agreement will have been breached such that the conditions to closing would not be satisfied or (c) by either Bioventus or Misonix, if the merger has not been consummated on or prior 11:59 p.m. New York City time on the end date, at a time when the merger agreement could have been terminated pursuant to (a) or (b) above, and: (x) at or prior to the Bioventus special meeting (in the case of a termination pursuant to (a) above), or at or prior to the time of the applicable breach by Bioventus (in the case of a termination pursuant to (b) above), any person must have publicly announced an intention to make an acquisition proposal involving Bioventus, or such an acquisition proposal must have been publicly disclosed, publicly announced, commenced, submitted or made and may not have been publicly withdrawn without qualification at least five business days prior to date of the Bioventus special meeting, in the case of a termination pursuant to (a) above, or the time of such breach, in the case of a termination pursuant to (b) above, and (y) on or prior to the date that is twelve months following the termination of the merger agreement, either (A) an acquisition transaction involving Bioventus is consummated or (B) a definitive agreement relating to such an acquisition transaction is entered into by Bioventus and the transaction contemplated thereby is subsequently consummated (it being understood that, for purposes of this clause (B), each reference to 20% in the definition of “acquisition transaction” above will be deemed to be a reference to 50%). |
• | if the Bioventus share issuance proposal is approved, no amendment may be made which by applicable law or Nasdaq regulation requires further approval of Bioventus stockholders without the further approval of such Bioventus stockholders; and |
• | if the Misonix merger proposal is approved, no amendment may be made which by applicable law or Nasdaq regulation requires further approval of Misonix stockholders without the further approval of such Misonix stockholders. |
Historical Bioventus |
Historical Misonix |
Merger Adjustments |
Financing Adjustments |
Noncontrolling Interest Adjustment |
Pro Forma |
|||||||||||||||||||||||||||||||
(Note 3) |
(Note 6) |
(Note 7) |
(Note 8) |
|||||||||||||||||||||||||||||||||
Assets |
||||||||||||||||||||||||||||||||||||
Current assets: |
||||||||||||||||||||||||||||||||||||
Cash and cash equivalents |
$ | 136,065 | $ | 31,046 | $ | (244,204 | ) | (a | ) | $ | 179,248 | (a | ) | $ | — | $ | 102,155 | |||||||||||||||||||
Restricted cash |
2,003 | — | — | — | — | 2,003 | ||||||||||||||||||||||||||||||
Accounts receivable, net |
102,029 | 11,350 | — | — | — | 113,379 | ||||||||||||||||||||||||||||||
Inventory |
34,020 | 15,752 | 5,662 | (b | ) | — | — | 55,434 | ||||||||||||||||||||||||||||
Prepaid and other current assets |
15,943 | 1,119 | — | 25 | — | 17,087 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total current assets |
290,060 | 59,267 | (238,542 | ) | 179,273 | — | 290,058 | |||||||||||||||||||||||||||||
Property and equipment, net |
8,960 | 9,253 | — | — | — | 18,213 | ||||||||||||||||||||||||||||||
Goodwill |
52,135 | 108,235 | 47,041 | (c | ) | — | — | 207,411 | ||||||||||||||||||||||||||||
Intangible assets, net |
257,848 | 20,530 | 424,470 | (d | ) | — | — | 702,848 | ||||||||||||||||||||||||||||
Operating lease assets |
17,669 | 1,289 | — | — | — | 18,958 | ||||||||||||||||||||||||||||||
Deferred tax assets |
481 | — | — | — | — | 481 | ||||||||||||||||||||||||||||||
Investments and other assets |
19,483 | 286 | (129 | ) | (e | ) | 327 | (c | ) | — | 19,967 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total assets |
$ | 646,636 | $ | 198,860 | $ | 232,840 | $ | 179,600 | $ | — | $ | 1,257,936 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Liabilities and Stockholders’ Equity |
||||||||||||||||||||||||||||||||||||
Current liabilities: |
||||||||||||||||||||||||||||||||||||
Accounts payable |
$ | 9,881 | $ | 4,487 | $ | — | $ | — | $ | — | $ | 14,368 | ||||||||||||||||||||||||
Accrued liabilities |
105,246 | 11,185 | 1,097 | (f | ) | — | — | 117,528 | ||||||||||||||||||||||||||||
Accrued equity-based compensation |
10,875 | — | — | — | — | 10,875 | ||||||||||||||||||||||||||||||
Current portion of long-term debt |
15,000 | 1,250 | (1,250 | ) | (g | ) | 12,338 | (b | ) | — | 27,338 | |||||||||||||||||||||||||
Current portion of contingent consideration |
13,220 | — | — | — | — | 13,220 | ||||||||||||||||||||||||||||||
Other current liabilities |
3,964 | 5,770 | (5,199 | ) | (h | ) | — | — | 4,535 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total current liabilities |
158,186 | 22,692 | (5,352 | ) | 12,338 | — | 187,864 | |||||||||||||||||||||||||||||
Long-term debt, less current portion |
166,084 | 39,346 | (39,346 | ) | (g | ) | 168,569 | (b | ) | — | 334,653 | |||||||||||||||||||||||||
Deferred income taxes |
48,410 | 73 | 108,388 | (n | ) | — | — | 156,871 | ||||||||||||||||||||||||||||
Contingent consideration, less current portion |
30,421 | — | — | — | — | 30,421 | ||||||||||||||||||||||||||||||
Other long-term liabilities |
24,171 | 1,549 | — | — | — | 25,720 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total liabilities |
427,272 | 63,660 | 63,690 | 180,907 | — | 735,529 | ||||||||||||||||||||||||||||||
Commitments and contingencies |
||||||||||||||||||||||||||||||||||||
Preferred stock |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||
Class A common stock |
41 | 2 | 16 | (i | ) | — | — | 59 | ||||||||||||||||||||||||||||
Class B common stock |
16 | — | — | — | — | 16 | ||||||||||||||||||||||||||||||
Additional paid-in capital |
146,199 | 188,983 | 123,056 | (i | ) | — | (106,784 | ) | (a | ) | 351,454 | |||||||||||||||||||||||||
Accumulated deficit |
(5,167 | ) | (53,785 | ) | 46,078 | (j | ) | (1,307 | ) | (d | ) | — | (14,181 | ) | ||||||||||||||||||||||
Accumulated other comprehensive income |
468 | — | — | — | — | 468 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total stockholders’ equity attributable to Bioventus |
141,557 | 135,200 | 169,150 | (1,307 | ) | (106,784 | ) | 337,816 | ||||||||||||||||||||||||||||
Noncontrolling interest |
77,807 | — | — | — | 106,784 | (a | ) | 184,591 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total stockholders’ equity |
219,364 | 135,200 | 169,150 | (1,307 | ) | — | 522,407 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total liabilities and stockholders’ equity |
$ | 646,636 | $ | 198,860 | $ | 232,840 | $ | 179,600 | $ | — | $ | 1,257,936 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Historical BV LLC |
Historical Misonix |
Offering adjustments |
Merger adjustments |
Financing Adjustments |
Noncontrolling Interest Adjustment |
Pro Forma |
||||||||||||||||||||||||||||||||||||||
(Note 3) |
(Note 5) |
(Note 6) |
(Note 7) |
(Note 8) |
||||||||||||||||||||||||||||||||||||||||
Net sales |
$ | 321,161 | $ | 67,608 | $ | — | $ | — | $ | — | $ | — | $ | 388,769 | ||||||||||||||||||||||||||||||
Cost of sales (including depreciation and amortization) |
87,642 | 19,967 | — | 27,939 | |
(b (d (k |
) ) ) |
— | — | 135,548 | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Gross profit |
233,519 | 47,641 | — | (27,939 | ) | — | — | 253,221 | ||||||||||||||||||||||||||||||||||||
Selling, general and administrative expense |
193,078 | 55,395 | 8,044 | (a | ) | 24,512 | |
(k (m |
) ) |
1,307 | (d | ) | — | 282,336 | ||||||||||||||||||||||||||||||
Research and development expense |
11,202 | 5,276 | 781 | (a | ) | 337 | (k | ) | — | — | 17,596 | |||||||||||||||||||||||||||||||||
Restructuring costs |
563 | — | — | — | — | — | 563 | |||||||||||||||||||||||||||||||||||||
Depreciation and amortization |
7,439 | 4,198 | — | (1,779 | ) | (d | ) | — | — | 9,858 | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Operating income (loss) |
21,237 | (17,228 | ) | (8,825 | ) | (51,009 | ) | (1,307 | ) | — | (57,132 | ) | ||||||||||||||||||||||||||||||||
Interest expense (income) |
9,751 | 3,563 | (644 | ) | (b | ) | (3,563 | ) | (l | ) | 1,418 | (e | ) | — | 10,525 | |||||||||||||||||||||||||||||
Other income |
(4,428 | ) | (9 | ) | — | — | — | — | (4,437 | ) | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Other expense (income) |
5,323 | 3,554 | (644 | ) | (3,563 | ) | 1,418 | — | 6,088 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Income (loss) before income taxes |
15,914 | (20,782 | ) | (8,181 | ) | (47,446 | ) | (2,725 | ) | — | (63,220 | ) | ||||||||||||||||||||||||||||||||
Income tax expense (benefit) |
1,192 | (414 | ) | 745 | (c | ) | (16,677 | ) | (n | ) | (683 | ) | (f | ) | — | (15,837 | ) | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Net income (loss) |
14,722 | (20,368 | ) | (8,926 | ) | (30,769 | ) | (2,042 | ) | — | (47,383 | ) | ||||||||||||||||||||||||||||||||
Loss attributable to noncontrolling interest |
1,689 | — | — | — | — | 9,087 | (b | ) | 10,776 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Net income (loss) attributable to equity holders |
$ | 16,411 | $ | (20,368 | ) | $ | (8,926 | ) | $ | (30,769 | ) | $ | (2,042 | ) | $ | 9,087 | $ | (36,607 | ) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Net income attributable to equity holders |
$ | 16,411 | ||||||||||||||||||||||||||||||||||||||||||
Accumulated unpaid preferred distribution |
(6,133 | ) | ||||||||||||||||||||||||||||||||||||||||||
Net income allocated to participating shareholders |
(5,895 | ) | ||||||||||||||||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||||||||||||||
Net income attributable to Bioventus common unit holders |
$ | 4,383 | ||||||||||||||||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||||||||||||||
Net income (loss) per unit/share—basic and diluted |
$ | 0.89 | $ | (1.19 | ) | (Note 9 | ) | $ | (0.61 | ) | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||
Weighted-average units/shares used to compute net income (loss) per unit/share |
4,900,000 | 17,044,744 | (Note 9 | ) | 60,125,824 | |||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
Historical Bioventus |
Historical Misonix |
Offering adjustments |
Merger adjustments |
Financing Adjustments |
Noncontrolling Interest Adjustment |
Pro Forma |
||||||||||||||||||||||||||||||||||||||||||
(Note 3) |
(Note 5) |
(Note 6) |
(Note 7) |
(Note 8) |
||||||||||||||||||||||||||||||||||||||||||||
Net sales |
$ | 191,594 | $ | 38,032 | $ | — | $ | — | $ | — | $ | — | $ | 229,626 | ||||||||||||||||||||||||||||||||||
Cost of sales (including depreciation and amortization) |
55,725 | 11,013 | — | 11,119 | |
(d (k |
) ) |
— | — | 77,857 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
Gross profit |
135,869 | 27,019 | — | (11,119 | ) | — | — | 151,769 | ||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative expense |
103,736 | 28,642 | 23,454 | (a | ) | (1,544 | ) | (k | ) | — | — | 154,288 | ||||||||||||||||||||||||||||||||||||
Research and development expense |
5,783 | 2,810 | 1,865 | (a | ) | (68 | ) | (k | ) | — | — | 10,390 | ||||||||||||||||||||||||||||||||||||
Change in fair value of contingent consideration |
641 | — | — | — | — | — | 641 | |||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization |
3,777 | 2,236 | — | (831 | ) | (d | ) | — | — | 5,182 | ||||||||||||||||||||||||||||||||||||||
Impairment of variable interest entity assets |
5,674 | — | — | — | — | — | 5,674 | |||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
Operating income (loss) |
16,258 | (6,669 | ) | (25,319 | ) | (8,676 | ) | — | — | (24,406 | ) | |||||||||||||||||||||||||||||||||||||
Interest (income) expense |
(1,195 | ) | 1,731 | 2,774 | (b | ) | (1,731 | ) | (l | ) | 1,239 | (e | ) | — | 2,818 | |||||||||||||||||||||||||||||||||
Other expense (income) |
2,064 | (302 | ) | — | — | — | — | 1,762 | ||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
Other expense |
869 | 1,429 | 2,774 | (1,731 | ) | 1,239 | — | 4,580 | ||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
Income (loss) before income taxes |
15,389 | (8,098 | ) | (28,093 | ) | (6,945 | ) | (1,239 | ) | — | (28,986 | ) | ||||||||||||||||||||||||||||||||||||
Income tax expense (benefit) |
1,641 | 132 | (4,823 | ) | (c | ) | (3,900 | ) | (n | ) | (310 | ) | (f | ) | — | (7,260 | ) | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
Net income (loss) |
13,748 | (8,230 | ) | (23,270 | ) | (3,045 | ) | (929 | ) | — | (21,726 | ) | ||||||||||||||||||||||||||||||||||||
Loss attributable to noncontrolling interest |
7,062 | — | — | — | — | 1,809 | (b | ) | 8,871 | |||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
Net income (loss) attributable to stock holders |
$ | 20,810 | $ | (8,230 | ) | $ | (23,270 | ) | $ | (3,045 | ) | $ | (929 | ) | $ | 1,809 | $ | (12,855 | ) | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
Net loss per share—basic and diluted |
$ | (0.12 | ) | (a | ) | $ | (0.48 | ) | (Note 9 | ) | $ | (0.21 | ) | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||
Weighted-average shares used to compute net loss per share |
41,802,840 | 17,226,190 | (Note 9 | ) | 60,125,824 | |||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
(a) |
Bioventus per share information for the six months ended July 3, 2021 represents loss per share of Class A common stock and weighted-average shares of Class A common stock outstanding from February 16, 2021 through July 3, 2021, the period following Bioventus Inc.’s IPO and related transactions described in the Bioventus 2020 Annual Report on Form 10-K. |
Historical as of June 30, 2021 |
Reclassifications |
As of June 30, 2021 |
||||||||||
Assets |
||||||||||||
Total current assets |
$ | 59,267 | $ | — | $ | 59,267 | ||||||
Property, plant and equipment, net |
9,253 | — | 9,253 | |||||||||
Patents, net |
790 | (790 | ) | — | ||||||||
Goodwill |
108,235 | — | 108,235 | |||||||||
Intangible assets, net |
19,740 | 790 | 20,530 | |||||||||
Lease right-of-use |
1,289 | — | 1,289 | |||||||||
Other assets |
286 | — | 286 | |||||||||
|
|
|
|
|
|
|||||||
Total assets |
$ | 198,860 | $ | — | $ | 198,860 | ||||||
|
|
|
|
|
|
|||||||
Liabilities and shareholders’ equity |
||||||||||||
Current liabilities: |
||||||||||||
Accounts payable |
$ | 4,487 | $ | — | $ | 4,487 | ||||||
Accrued liabilities |
— | 11,185 | 11,185 | |||||||||
Accrued expenses and other current liabilities |
11,185 | (11,185 | ) | — | ||||||||
Current portion of lease liabilities |
571 | (571 | ) | — | ||||||||
Current portion of notes payable |
6,449 | (5,199 | ) | 1,250 | ||||||||
Other current liabilities |
— | 5,770 | 5,770 | |||||||||
|
|
|
|
|
|
|||||||
Total current liabilities |
22,692 | — | 22,692 | |||||||||
Non-current liabilities: |
||||||||||||
Notes payable |
39,346 | 39,346 | ||||||||||
Lease liabilities |
763 | (763 | ) | — | ||||||||
Deferred tax liabilities |
73 | 73 | ||||||||||
Other non-current liabilities |
786 | 763 | 1,549 | |||||||||
|
|
|
|
|
|
|||||||
Total liabilities |
63,660 | — | 63,660 | |||||||||
Total shareholders’ equity |
135,200 | — | 135,200 | |||||||||
|
|
|
|
|
|
|||||||
Total liabilities and shareholders’ equity |
$ | 198,860 | $ | — | $ | 198,860 | ||||||
|
|
|
|
|
|
Historical |
||||||||||||||||||||
For the year ended June 30, 2020 |
For the six months ended December 31, 2019 |
For the six months ended December 31, 2020 |
Reclassifications |
For the twelve moths ended December 31, 2020 |
||||||||||||||||
Revenue |
$ | 62,484 | $ | 30,868 | $ | 35,992 | $ | — | $ | 67,608 | ||||||||||
Cost of revenue |
18,774 | 9,182 | 10,375 | — | 19,967 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Gross profit |
43,710 | 21,686 | 25,617 | — | 47,641 | |||||||||||||||
Selling, general and administrative expense |
— | — | — | 55,395 | 55,395 | |||||||||||||||
Selling expense |
40,233 | 17,001 | 19,393 | (42,625 | ) | — | ||||||||||||||
General and administrative expense |
17,954 | 9,357 | 8,371 | (16,968 | ) | — | ||||||||||||||
Research and development expense |
4,916 | 1,859 | 2,219 | 5,276 | ||||||||||||||||
Depreciation and amortization |
— | — | — | 4,198 | 4,198 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Operating loss |
(19,393 | ) | (6,531 | ) | (4,366 | ) | — | (17,228 | ) | |||||||||||
Interest income |
(91 | ) | (24 | ) | (4 | ) | 71 | — | ||||||||||||
Interest expense |
2,620 | 869 | 1,883 | (71 | ) | 3,563 | ||||||||||||||
Other (income) loss |
(6 | ) | 1 | (2 | ) | — | (9 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Other expense |
2,523 | 846 | 1,877 | — | 3,554 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Loss before income taxes |
(21,916 | ) | (7,377 | ) | (6,243 | ) | — | (20,782 | ) | |||||||||||
Income tax benefit |
(4,499 | ) | (4,085 | ) | — | — | (414 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss |
$ | (17,417 | ) | $ | (3,292 | ) | $ | (6,243 | ) | $ | — | $ | (20,368 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
Historical |
||||||||||||||||
For the year ended June 30, 2021 |
For the six months ended December 31, 2020 |
Reclassifications |
For the six months ended July 3, 2021 |
|||||||||||||
Revenue |
$ | 74,024 | $ | 35,992 | $ | — | $ | 38,032 | ||||||||
Cost of revenue |
21,388 | 10,375 | — | 11,013 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit |
52,636 | 25,617 | — | 27,019 | ||||||||||||
Selling, general and administrative expense |
— | — | 28,642 | 28,642 | ||||||||||||
Selling expense |
42,087 | 19,393 | (22,694 | ) | — | |||||||||||
General and administrative expense |
16,555 | 8,371 | (8,184 | ) | — | |||||||||||
Research and development expense |
5,029 | 2,219 | — | 2,810 | ||||||||||||
Depreciation and amortization |
— | — | 2,236 | 2,236 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating loss |
(11,035 | ) | (4,366 | ) | — | (6,669 | ) | |||||||||
Interest income |
(10 | ) | (4 | ) | 6 | — | ||||||||||
Interest expense |
3,620 | 1,883 | (6 | ) | 1,731 | |||||||||||
Other income |
(304 | ) | (2 | ) | (302 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other expense |
3,306 | 1,877 | — | 1,429 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss before income taxes |
(14,341 | ) | (6,243 | ) | — | (8,098 | ) | |||||||||
Income tax expense |
132 | — | 132 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss |
$ | (14,473 | ) | $ | (6,243 | ) | $ | — | $ | (8,230 | ) | |||||
|
|
|
|
|
|
|
|
Common Shares |
Price per Share |
Amount |
||||||||||
Cash election consideration |
17,410,045 | $ | 10.50 | $ | 182,805 | |||||||
Stock election consideration |
18,322,984 | $ | 15.39 | 281,991 | ||||||||
|
|
|||||||||||
Merger consideration |
464,796 | |||||||||||
Estimated cash to settle Misonix debt |
41,994 | |||||||||||
Assumed Options |
32,306 | |||||||||||
Less cash acquired |
(21,587 | ) | ||||||||||
|
|
|||||||||||
Total estimated preliminary merger consideration |
$ | 517,509 | ||||||||||
|
|
Price per Share |
Stock election consideration |
|||||||
As presented |
$ | 15.39 | $ | 281,991 | ||||
10% increase |
$ | 16.93 | $ | 310,190 | ||||
10% decrease |
$ | 13.85 | $ | 253,792 |
Risk-free interest rate |
0.75 | % | ||
Expected dividend yield |
— | % | ||
Expected stock price volatility |
35.22 | % | ||
Expected term of stock options |
4.5 | |||
Exercise price |
$ | 7.86 | ||
Stock price of stock options granted |
$ | 15.39 |
Price per Share |
Assumed Options value |
|||||||
As presented |
$ | 15.39 | $ | 32,306 | ||||
10% increase |
$ | 16.93 | $ | 37,662 | ||||
10% decrease |
$ | 13.85 | $ | 27,079 |
Accounts receivable |
$ | 11,350 | ||
Inventory |
21,414 | |||
Prepaid and other current assets |
1,119 | |||
Property and equipment |
9,253 | |||
Goodwill (1) |
155,276 | |||
Intellectual property |
445,000 | |||
Other assets |
1,446 | |||
|
|
|||
Total assets acquired |
644,858 | |||
Accounts payable and accrued liabilities |
16,768 | |||
Other current liabilities |
571 | |||
Deferred tax liability |
108,461 | |||
Other long-term liabilities |
1,549 | |||
|
|
|||
Total liabilities assumed |
127,349 | |||
|
|
|||
Net assets acquired |
$ | 517,509 | ||
|
|
(1) | Goodwill represents the excess of merger consideration over the fair value of the underlying net assets acquired. In accordance with ASC 350, Goodwill and Other Intangible Assets, goodwill will not be amortized but rather subject to annual impairment test, absent any indicators of impairment. Goodwill is attributable to planned growth in new markets and synergies expected to be achieved from the combined operations of Bioventus and Misonix. Goodwill recorded in the mergers is not expected to be deductible for tax purposes. Bioventus management is still in the process of valuing any identifiable intangible assets, to which the valuation may impact the final goodwill amount. |
(a) | In connection with the IPO Bioventus granted new equity-based compensation awards to certain employees and directors and launched its employee stock purchase plan. Accordingly this results in additional estimated equity compensation expense. In addition, during the six months ended July 3, 2021, in advance of the IPO, Bioventus recognized a change in fair value of accrued equity-based compensation resulting in a recovery of equity compensation expense. Adjustments to the statement of operations represents the following: |
Year Ended December 31, 2020 |
Six Months Ended July 3, 2021 |
|||||||
Selling, general and administrative expense |
||||||||
Additional equity compensation |
$ | 8,044 | $ | 800 | ||||
Change in fair value of equity awards granted prior to IPO |
— | 22,654 | ||||||
|
|
|
|
|||||
$ | 8,044 | $ | 23,454 | |||||
|
|
|
|
|||||
Research and development expense |
||||||||
Additional equity compensation |
$ | 781 | $ | 124 | ||||
Change in fair value of equity awards granted prior to IPO |
— | 1,741 | ||||||
|
|
|
|
|||||
$ | 781 | $ | 1,865 | |||||
|
|
|
|
(b) | Prior to the IPO an original LLC owner owned an Equity Participation Right Unit (EPR Unit). The EPR Unit was redeemed in connection with the IPO, at which time the EPR ceased to exist and all entitlements ended. Accordingly interest expense related to the EPR unit of $0.6 million was removed for the year ended December 31, 2020. During the six months ended July 3, 2021, in advance of the IPO, Bioventus recognized a change in fair value of the EPR resulting in interest income totaling $2.8 million which was also removed. |
(c) | Tax expense was adjusted to record the income tax impacts of the offering adjustments using an estimated statutory tax rate of 25.1%. This rate does not reflect the combined company’s effective tax rate, which includes other items and may be significantly different than the rates assumed for purposes of preparing these statements. |
(a) | Adjustment to cash represents the following: |
Cash election consideration |
$ | (182,805 | ) | |
Estimated cash to settle Misonix debt |
(41,994 | ) | ||
Cash paid for transaction costs expected to be incurred through the consummation of the transactions (1) |
(19,405 | ) | ||
|
|
|||
$ | (244,204 | ) | ||
|
|
(1) | Fees directly related to this filing totaling $2.2 million are estimated to be incurred by Bioventus and are recorded against APIC. $9.5 million in transaction costs are estimated to be incurred by Misonix and $7.7 million incurred by Bioventus which are included in the pro forma condensed combined statement of operations. |
(b) | Adjustment to acquired inventory, which consists primarily of raw materials and finished goods, at its preliminary fair value. The preliminary fair value considers replacement cost for raw materials and for finished goods, the estimated selling price adjusted for costs of the selling effort and a reasonable profit allowance for the selling effort. Bioventus will recognize the increased value of inventory in cost of goods sold as the inventory is sold, which for purposes of these unaudited pro forma condensed combined financial statements is assumed to occur within the first year after the mergers. The cost of goods sold associated with the increased inventory value totaling $5.7 million is included in the unaudited pro forma condensed combined statements of operations for the twelve months ended December 31, 2020. |
(c) | Adjustment to eliminate Misonix’s historical goodwill of $108.2 million and to recognize goodwill related to the proposed Combination of $155.3 million. Goodwill is calculated as the difference between the estimated purchase price and the fair value of identifiable tangible and intangible assets acquired net of liabilities assumed. The adjustment is preliminary and subject to change based upon final determination of the fair value of assets acquired and liabilities assumed and finalization of the purchase price. |
(d) | Adjustment to acquired intangible assets, consisting of intellectual property at its preliminary fair value, and the required increase to historical Misonix amortization expense to the balances below. The estimated fair value was determined using an income approach, a valuation technique that estimates the fair value of an asset based on market participant expectations of the cash flows that an asset would generate over its remaining useful life. |
Amortization Expense |
||||||||||||||||
Fair value |
Year ended December 31, 2020 |
Six months ended July 3, 2021 |
||||||||||||||
Acquired intangible assets (1) |
$ | 387,000 | Cost of sales | $ | 22,250 | $ | 11,125 | |||||||||
|
|
|
|
|
|
(1) | The adjustment to amortization expense was determined using the straight line method over the estimated useful life of 20 years. |
(e) | Adjustment to eliminate $0.1 million of historical deferred financing fee assets associated with Misonix’s historical revolving credit facility. The write-off of the deferred financing fee is recorded against accumulated deficit solely for the purposes of this presentation. As there is no continuing impact of the write-off on the combined company’s results, the debt deferred financing fee is not included in the unaudited pro forma condensed combined statements of operations. |
(f) | Adjustment to accrue for severance and change of control payments totaling $1.7 million for the certain Misonix employees partially offset by $0.4 million of accrued interest and $0.2 million of accrued exit fees associated with Misonix’s historical debt obligations. |
(g) | Adjustment to extinguish Misonix’s outstanding debt obligations of $40.6 million. The cash to be paid for the extinguishment of Misonix’s outstanding debt obligations totaled $42.0 million as described in Note 4. The difference between the cash to be paid and the carrying amount represents the loss on debt extinguishment from the prepayment penalties of $0.8 million, $0.4 million in accrued interest and $0.2 million of accrued exit fees. |
(h) | Adjustment to remove Misonix’s outstanding loan under the Paycheck Protection Program of $5.2 million as it is expected to be forgiven. |
(i) | Adjustment to remove Misonix historical common stock and APIC, issuance of stock election consideration, as well as Assumed Options: |
APIC |
||||
Elimination of historical balance (1) |
$ | (188,983 | ) | |
Issuance of stock election consideration (2) |
281,972 | |||
Assumed Options (3) |
32,306 | |||
Registration expenses |
(2,239 | ) | ||
|
|
|||
$ | 123,056 | |||
|
|
(1) | Reflects the elimination of Misonix’s APIC balance at June 30, 2021. |
(2) | Reflects the additional APIC value of the shares issued in connection with the mergers. |
(3) | Reflects the fair value of the Assumed Options. |
(j) | Adjustments to eliminate Misonix’s historical accumulated deficit balance and Bioventus transaction fees totaling $7.7 million. |
(k) | Adjustment to share-based compensation expense for the acceleration of Misonix’s unvested stock compensation awards and awards granted to the two additional board members. These increases were partially offset by the removal of historical Misonix share-based compensation expense for each of the unaudited pro forma condensed combined statements of operations. |
(l) | Adjustment to eliminate the historical interest expense associated with Misonix’s historical debt obligations for each of the unaudited pro forma condensed combined statements of operations. |
(m) | Adjustment to add Misonix and Bioventus transaction costs totaling $17.2 million. |
(n) | The mergers will qualify as a reorganization within the meaning of Section 368(a) of the Code. Deferred tax liability was adjusted to reflect the estimated deferred tax impacts related to acquisition accounting adjustments primarily as a result of the step-up in fair value of intangible assets and inventory. The incremental deferred tax impacts were calculated based on the tax effect of the estimated step-up in book basis of the net assets of Misonix using an estimated statutory tax rate of 25.1%. Tax expense was adjusted to record the income tax impacts of the merger adjustments using the same rate. This rate does not reflect the combined company’s effective tax rate, which includes other items and may be significantly different than the rates assumed for purposes of preparing these statements. |
(a) | Adjustment to cash represents the following as of July 3, 2021: |
Amounts borrowed under the Term Loan Facility |
$ | 262,000 | ||
Payment on Bioventus outstanding historical term loan |
(80,000 | ) | ||
Cash paid for fees related to the Term Loan Facility |
(2,752 | ) | ||
|
|
|||
$ | 179,248 | |||
|
|
(b) | Adjustment to debt represents the following: |
Current portion of long-term debt: |
||||
Record current portion of the Term Loan Facility (1) |
$ | 12,338 | ||
|
|
|||
Long-term debt, less current portion: |
||||
Record noncurrent portion of the Term Loan Facility (1) |
$ | 249,663 | ||
Payment on Bioventus outstanding historical term loan |
(80,000 | ) | ||
Financing fees related to the Term Loan Facility |
(1,094 | ) | ||
|
|
|||
Total adjustment to long-term debt, less current portion |
$ | 168,569 | ||
|
|
(1) | Pursuant to the terms of the Term Loan Facility, Bioventus is required to repay the amounts borrowed under the Term Loan Facility and the existing debt after the $80.0 million payment in quarterly installments of 1.875% of the total principal amount through December 31, 2022 and quarterly installments of 2.5% of the total principal amount through the maturity date, at which time the remaining principal balance will be due. |
(c) | Adjustment to record the new deferred financing fee asset of $0.3 million associated with the Term Loan Facility and allocated to the revolver. |
(d) | Adjustment to record the financing fees not eligible for deferral totaling $1.3 million associated with the Term Loan Facility. |
(e) | Adjustment to interest expense consists of the following: |
Year ended December 31, 2020 |
Six months ended July 3, 2021 |
|||||||
Eliminate historical Bioventus interest expense on long-term debt |
$ | (5,998 | ) | $ | (2,332 | ) | ||
Interest expense on long-term debt subsequent to the Debt Transactions (1) |
7,010 | 3,368 | ||||||
Increase in amortization of the original issue discount and certain deferred financing fees (2) |
406 | 203 | ||||||
|
|
|
|
|||||
$ | 1,418 | $ | 1,239 | |||||
|
|
|
|
(1) | Comprised of interest expense related to on long-term debt subsequent to the Debt Transactions. The weighted average cash interest rate, calculated including the effects of quarterly principal payment, is approximately 1.83%. |
(2) | Represents the original issue discount (OID) as well as certain fees paid to third parties for their services in arranging and structuring the financing. The OID and deferred financing fees are amortized using the straight line method which approximates the effective interest method |
(f) | Tax expense was adjusted to record the income tax impacts of the offering adjustments using an estimated statutory tax rate of 25.1%. This rate does not reflect the combined company’s effective tax rate, which includes other items and may be significantly different than the rates assumed for purposes of preparing these statements. |
Before |
After |
|||||||||||||||
Units |
Percentage |
Units |
Percentage |
|||||||||||||
BV LLC interest held by Bioventus Inc. |
41,062,652 | 72.2 | % | 59,385,636 | 79.0 | % | ||||||||||
BV LLC noncontrolling interest |
15,786,737 | 27.8 | % | 15,786,737 | 21.0 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
56,849,389 | 100.0 | % | 75,172,373 | 100.0 | % | |||||||||||
|
|
|
|
|
|
|
|
(a) | The pro forma noncontrolling interest as of July 3, 2021 is computed as follows by adjustment: |
BV LLC noncontrolling interest after mergers |
Pro forma noncontrolling interest |
|||||||||||
Historical Bioventus |
$ | 77,807 | ||||||||||
Adjustments: |
||||||||||||
Investment in Misonix |
$ | 517,509 | ||||||||||
Bioventus transaction costs |
(7,707 | ) | ||||||||||
Financing fees expensed |
(1,307 | ) | ||||||||||
|
|
|||||||||||
$ | 508,495 | 21.0 |
% |
106,784 |
||||||||
|
|
|||||||||||
$ | 184,591 | |||||||||||
|
|
(b) | The pro forma net loss (income) attributable to noncontrolling interest for the twelve months ended December 31, 2020 is computed as follows by adjustment: |
BV LLC noncontrolling interest |
Pro forma loss (income) attributable to noncontrolling interest |
|||||||||||
Historical BV LLC loss attributable to noncontrolling interest |
$ | 1,689 | ||||||||||
Adjustments: |
||||||||||||
Historical BV LLC net income |
$ | 16,411 | 27.8 | % | (4,562 | ) | ||||||
Offering adjustments |
$ | (8,926 | ) | 27.8 | % | 2,481 | ||||||
Historical Misonix net loss |
$ | (20,368 | ) | 21.0 | % | 4,277 | ||||||
Merger adjustments |
$ | (30,769 | ) | 21.0 | % | 6,461 | ||||||
Financing adjustments |
$ | (2,042 | ) | 21.0 | % | 429 | ||||||
|
|
|||||||||||
9,086 | ||||||||||||
|
|
|||||||||||
Pro forma loss attributable to noncontrolling interest |
$ | 10,775 | ||||||||||
|
|
(c) | The pro forma net loss (income) attributable to noncontrolling interest for the six months ended July 3, 2021 is computed as follows by adjustment: |
BV LLC noncontrolling interest |
Pro forma loss (income) attributable to noncontrolling interest |
|||||||||||
Historical Bioventus loss attributable to noncontrolling interest |
$ | 7,062 | ||||||||||
Adjustments: |
||||||||||||
Historical BV LLC net income prior to IPO |
$ | 25,977 | 27.8 | % | (7,222 | ) | ||||||
Offering adjustments |
$ | (23,270 | ) | 27.8 | % | 6,469 | ||||||
Historical Misonix net loss |
$ | (8,230 | ) | 21.0 | % | 1,728 | ||||||
Merger adjustments |
$ | (3,045 | ) | 21.0 | % | 639 | ||||||
Financing adjustments |
$ | (929 | ) | 21.0 | % | 195 | ||||||
|
|
|||||||||||
1,809 | ||||||||||||
|
|
|||||||||||
Pro forma loss attributable to noncontrolling interest |
$ | 8,871 | ||||||||||
|
|
Year ended December 31, 2020 |
Six months ended July 3, 2021 |
|||||||
Numerator for basic and diluted earnings per share calculation: |
||||||||
Pro forma net loss |
$ | (47,383 | ) | $ | (21,726 | ) | ||
Pro forma loss attributable to noncontrolling interest |
10,776 | 8,871 | ||||||
|
|
|
|
|||||
Pro forma net loss attributable to the combined company |
$ | (36,607 | ) | $ | (12,855 | ) | ||
|
|
|
|
|||||
Denominator for basic and diluted earnings per share calculation: |
||||||||
Weighted-average Bioventus’ outstanding common stock (1) |
41,802,840 | 41,802,840 | ||||||
Common stock issued in connection with the mergers |
18,322,984 | 18,322,984 | ||||||
|
|
|
|
|||||
Pro forma weighted average shares (basic and diluted) |
60,125,824 | 60,125,824 | ||||||
|
|
|
|
|||||
Pro forma net loss per share—basic and diluted |
$ | (0.61 | ) | $ | (0.21 | ) | ||
|
|
|
|
(1) | Weighted-average shares of Bioventus Class A common stock outstanding, basic and diluted as of July 3, 2021. |
BV LLC noncontrolling interest (1) |
15,786,737 | |||
Stock options |
8,398,979 | |||
Restricted stock units |
951,911 | |||
Unvested shares of Class A common stock |
34,698 | |||
|
|
|||
Total |
25,172,325 | |||
|
|
(1) | Class A Shares reserved for future issuance upon redemption or exchange of LLC interests not held by Bioventus. |
• | the limited liability company agreement of BV LLC was amended and restated (Bioventus LLC agreement) to, among other things, (i) provide for a new single class of common membership interests in BV LLC (LLC interests), (ii) exchange all of the then existing membership interests of the holders of BV LLC membership interests (original LLC owners) for LLC interests and (iii) appoint Bioventus Inc. as the sole managing member of BV LLC; and |
• | the acquisition, by merger, of certain members of BV LLC (former LLC owners), for which Bioventus issued 31,838,589 shares of Class A common stock as merger consideration (Merger). |
• | Pain Treatments and Joint Preservation |
(a) | Durolane, a single injection therapy, was launched in the United States in 2018 and is also marketed outside the United States in more than 30 countries including Europe through a CE mark, which is an abbreviation for Conformité Européenne or European Conformity; |
(b) | GELSYN-3, a three injection therapy, was launched in the United States in 2016; |
(c) | SUPARTZ FX, a five injection therapy, was launched in the United States in 2001; and |
(d) | STIMROUTER, a peripheral nerve stimulation product offered through Bioness. |
• | Bone Graft Substitutes. |
• | Restorative Therapies. |
• | Continue to expand market share in HA viscosupplementation |
• | Introduce new pain treatment and joint preservation products. |
(a) | Agili-C. off-the-shelf Agili-C implant received breakthrough device designation by the FDA in the fourth quarter of 2020. Bioventus has an option to acquire 100% of CartiHeal’s shares pursuant to the terms and subject to the conditions set forth in the Option and Equity Purchase Agreement and as described above. See “Description of Bioventus’ Business—Development and Clinical Pipeline—Treatment of Cartilage for Osteochondral defects—CartiHeal (developer of Agili-C) investment and option and equity purchase agreement.” CartiHeal submitted the non-clinical module of the PMA in January 2021 and expects to submit the final, clinical module of a Modular PMA in the fourth quarter of 2021 seeking FDA approval. |
(b) | MOTYS. |
(c) | PROcuff. bio-inductive collagen implant for regeneration of tendon tissue in the rotator cuff. Bioventus expects to file a request for 510(k) clearance in either the second or third quarter of 2022. |
• | Further develop and commercialize its BGS portfolio. |
• | Expand indications for use for its Exogen system non-union. Bioventus plans to submit the second PMA supplement in the second quarter of 2022 and the third PMA supplement in the second half of 2023. |
• | Invest in research and development. |
• | Pursue business development opportunities. |
• | Opportunistically grow its international markets. |
Product |
Description |
Regulatory pathway |
Region where marketed (1) | |||
Single injection HA viscosupplementation therapy |
• PMA • Device approval by Health Canada • CE mark and other registrations (2) |
• United States • Canada • Europe |
Product |
Description |
Regulatory pathway |
Region where marketed (1) | |||
Three injection HA viscosupplementation therapy |
• PMA |
• United States | ||||
Five injection HA viscosupplementation therapy |
• PMA |
• United States |
(1) |
Bioventus maintains exclusive distribution agreements with respect to Durolane, GELSYN-3 and SUPARTZ FX in the United States. Bioventus maintains exclusive distribution agreements and own certain assets with respect to Durolane outside the United States. |
(2) |
Durolane is also approved for marketing in Argentina, Australia, Brazil, Columbia, India, Indonesia, Jordan, Malaysia, Mexico, New Zealand, Russia, Switzerland, Taiwan, Turkey and the United Arab Emirates (UAE). |
Product Manufacturer or distributor |
Indication |
Source and process |
Active ingredient / treatment dosage |
Duration | ||||
Bioventus |
OA of the knee | Non-animalstabilized HA |
NASHA / (60 mg) | Six months | ||||
Synvisc-One Sanofi S.A. |
OA of the knee | Animal sourced Hylan A and Hylan B polymers | Hylan G-F 20 / (48 mg) |
Six months | ||||
Monovisc DePuy Orthopaedics, Inc. |
OA of the knee | Non-animal cross-linked sourced HA |
2.2% sodium hyaluronate / (88 mg) | Six months | ||||
Gel-One Zimmer Biomet Holdings, Inc. |
OA of the knee | Animal sourced HA | 1.0% sodium hyaluronate /(30 mg) | Three months |
* p | ||
# p | ||
* p |
Product Manufacturer or distributor |
Indication |
Source and process |
Active ingredient / total treatment dosage |
Number of injections per course |
Duration | |||||
Bioventus |
OA of the knee | Fermented, bacterial derived HA | 0.84% sodium hyaluronate (50.4 mg) |
Three | Six months | |||||
Bioventus |
OA of the knee | Naturally derived, purified HA | 1.0% sodium hyaluronate (75/125 mg) |
Three to Five | Six months | |||||
Synvisc Sanofi S.A. |
OA of the knee | Hylan polymers, purified HA | 0.8% Hylan G-F 20 (48 mg) |
Three | Six months | |||||
Euflexx Ferring Pharmaceuticals Inc. |
OA of the knee | Fermented, bacterial derived HA | 1.0% sodium hyaluronate (60 mg) |
Three | Six months | |||||
Hyalgan Fidia Farmaceutici S.p.A. |
OA of the knee | Naturally derived, purified HA | 1.0% sodium hyaluronate (60 mg/100 mg) |
Three to Five | Six months | |||||
Genvisc-850 OrthogenRx, Inc. |
OA of the knee | Fermented, bacterial derived HA | 1.0% sodium hyaluronate (75/125 mg) |
Three to Five | Six months |
Product |
Indications |
Description |
Regulatory pathway / year launched | |||
Allograft | ||||||
Orthopedic, neurosurgical and reconstructive bone grafting procedures | An allogeneic bone graft that is available in multiple formats (fibers, putty, sponge and granules) that is processed with bone marrow cells to maintain the wide array of growth factors present in native bone | •Section 361 HCT/P / 2009 | ||||
Posterolateral spine procedures | Derived from human allograft bone tissue and is combined with a migration-resistant resorbable carrier and formulated into a putty | •510(k) / 2012 | ||||
Orthopedic, neurosurgical and reconstructive bone grafting procedures | 100% cancellous bone with compressible, elastic and sponge-like attributes, offered in filler, block and strip options, as well as mineralized chips | •Section 361 HCT/P / 2012 | ||||
Synthetic |
||||||
Standalone posterolateral spine, extremities and pelvis, as well as a bone graft extender in the posterolateral spine | Bioactive synthetic bone graft substitute comprised of a mixture of calcium phosphate granules and bioglass granules suspended in a resorbable polymer carrier that facilitates handling and delivery of the granule components to fill spaces of missing bone |
•510(k) / 2014 | ||||
Posterolateral spine when mixed with autograft, extremities and pelvis | Bioactive synthetic bone graft in the form of irregular granules of bioglass to repair bone defects | •510(k) / 2011 | ||||
Posterolateral spine, extremities and pelvis | Next-generation mineralized two-phase calcium phosphate bone void filler comprised of a collagen scaffold designed for optimized intra-operative handling and biologic responsiveness at the defect site |
•510(k) / 2010 |
Posterolateral spine, extremities and pelvis | Next-generation mineralized bone void filler comprised of bioglass and biphasic mineral granules embedded in a collagen scaffold designed for optimized intra-operative handling and biologic responsiveness at the defect site. | •510(k) / 2020 |
Product |
Description |
Regulatory pathway |
Region where marketed (1) | |||
|
Ultrasound bone healing system for nonunion fractures and fresh fractures to the tibia and radius(2) | • PMA • Device approval by Health Canada • CE mark and other registrations (2) |
• United States • Canada • Europe • Japan |
(1) |
Bioventus’ Exogen system is indicated in the United States for the non-invasive treatment of established nonunions, excluding skull and vertebra, and for accelerating the time to a healed fracture for fresh, closed, |
posteriorly displaced distal radius fractures and fresh, closed or Grade I open long bone fractures in skeletally mature individuals when these fractures are orthopedically managed by closed reduction and cast immobilization. Bioventus own its Exogen system and market it both in and outside the United States. |
(2) |
Exogen is also approved for marketing in Australia, Japan, New Zealand, Saudi Arabia, Turkey and the UAE. |
Product Manufacturer |
Daily treatment times |
Technology |
Indications | |||
Bioventus |
20 minutes | Low-intensity pulsed ultrasound |
Nonunions and select fresh fractures (2) | |||
CMF OL1000 DJO Global, Inc. |
30 minutes | Combined magnetic field | Nonunions | |||
Physio-Stim Orthofix International B.V. |
3 hours | Pulsed electromagnetic field | Nonunions | |||
EBI Bone Healing System Zimmer Biomet Holdings, Inc. |
10 hours | Pulsed electromagnetic field | Nonunions | |||
OsteoGen Zimmer Biomet Holdings, Inc. |
24 hours | Direct electrical current (implanted) | Nonunions | |||
Orthopak 2 Bone Growth Stimulator Zimmer Biomet Holdings, Inc. |
24 hours | Capacitive coupling | Nonunions |
(1) |
Heal rates for fresh fracture as compared to placebo. |
(2) |
Bioventus’ Exogen system is indicated in the United States for the non-invasive treatment of established nonunions excluding skull and vertebra and for accelerating the time to a healed fracture for fresh, closed, posteriorly displaced distal radius fractures and fresh, closed or Grade I open long bone fractures in skeletally mature individuals when these fractures are orthopedically managed by closed reduction and cast immobilization. |
Country |
Application Number |
Filing Date |
Patent Number |
Application Status |
Expected Expiration Date |
Description |
Product | |||||||
AU | 2009324417 | December 13, 2009 |
2009324417 | Issued | December 2029 |
Directed to methods of making osteoinductive implants | OsteoAMP | |||||||
AU | 2014259553 | November 14, 2014 |
2014259553 | Issued | December 2029 |
Directed to methods of making osteoinductive implants | OsteoAMP |
Country |
Application Number |
Filing Date |
Patent Number |
Application Status |
Expected Expiration Date |
Description |
Product | |||||||
AU | 2016213839 | August 11, 2016 |
2016213839 | Issued | December 2029 |
Directed to methods of making osteoinductive implants | OsteoAMP | |||||||
CA | 2746668 | December 13, 2009 |
2746668 | Issued | December 2029 |
Directed to methods of making osteoinductive implants | OsteoAMP | |||||||
CN | 200980155596.X | December 13, 2009 |
200980155596.X | Issued | December 2029 |
Directed to methods of making osteoinductive implants | OsteoAMP | |||||||
CN | 201410413348.3 | August 20, 2014 |
201410413348.3 | Issued | December 2029 |
Directed to methods of making osteoinductive implants | OsteoAMP |
Country |
Application Number |
Filing Date |
Patent Number |
Application Status |
Expected Expiration Date |
Description |
Product | |||||||
EP | 9832666.3 | December 13, 2009 |
Pending | December 2029 |
Directed to methods of making osteoinductive implants | OsteoAMP | ||||||||
HK | 15105678.1 | June 16, 2015 | HK1205007 | Issued | December 2029 |
Directed to methods of making osteoinductive implants | OsteoAMP | |||||||
IN | 2567/KOLNP/ 2011 |
February 4, 2016 |
Pending | December 2029 |
Directed to methods of making osteoinductive implants | OsteoAMP | ||||||||
KR | 10-2011-7016270 |
July 2, 2019 | 10-1713346 |
Issued | December 2029 |
Directed to methods of making osteoinductive implants | OsteoAMP | |||||||
US | 15/016072 | December 13, 2009 |
10383974 | Issued | December 2029 |
Directed to methods of making osteoinductive implants | OsteoAMP | |||||||
US | 16/459778 | February 4, 2016 |
Pending | December 2029 |
Directed to methods of making osteoinductive implants | OsteoAMP | ||||||||
GB | 9832666.3 | December 13, 2009 |
Pending | December 2029 |
Directed to methods of making osteoinductive implants | OsteoAMP | ||||||||
FR | 9832666.3 | December 13, 2009 |
Pending | December 2029 |
Directed to methods of making osteoinductive implants | OsteoAMP | ||||||||
DE | 9832666.3 | December 13, 2009 |
Pending | December 2029 |
Directed to methods of making osteoinductive implants | OsteoAMP | ||||||||
IT | 9832666.3 | December 13, 2009 |
Pending | December 2029 |
Directed to methods of making osteoinductive implants | OsteoAMP |
Country |
Application Number |
Filing Date |
Patent Number |
Application Status |
Expected Expiration Date |
Description |
Product | |||||||
CH | 9832666.3 | December 13, 2009 |
Pending | December 2029 |
Directed to methods of making osteoinductive implants | OsteoAMP | ||||||||
BE | 9832666.3 | December 13, 2009 |
Pending | December 2029 |
Directed to methods of making osteoinductive implants | OsteoAMP | ||||||||
ES | 9832666.3 | December 13, 2009 |
Pending | December 2029 |
Directed to methods of making osteoinductive implants | OsteoAMP | ||||||||
PT | 9832666.3 | December 13, 2009 |
Pending | December 2029 |
Directed to methods of making osteoinductive implants | OsteoAMP | ||||||||
US | 09/925,193 | August 9, 2001 |
7429248 | Granted | July 2025 | Directed to applying ultrasound to tissue using a modal converter having a plurality of angled sides. | Exogen | |||||||
AU | 2006203281 | August 1, 2006 |
2006203281 | Granted | August 2025 |
Directed to treating a neuropathy disease with ultrasound using a specific frequency and pulse rate for the signal | Exogen | |||||||
US | 11/462271 | August 3, 2006 |
8048006 | Granted | February 2029 |
Directed to treating a neuropathy disease with ultrasound using a specific frequency and pulse rate for the signal | Exogen |
Country |
Application Number |
Filing Date |
Patent Number |
Application Status |
Expected Expiration Date |
Description |
Product | |||||||
US | 12/296,333 | April 7, 2007 | 8226582 | Granted | June 2028 | Directed to applying ultrasound to tissue using a modal converter having an oblique angle and speed of sound similar to human tissue | Exogen | |||||||
US | 17/097,350 | November 13, 2020 |
Pending | November 2040 |
Directed to placental tissue particulates compositions, methods of treating musculoskeletal or orthopedic conditions, methods of treating pain associated with osteoarthritis, kits and methods of making the compositions | MOTYS | ||||||||
PCT | PCT/US20/60393 | November 13, 2020 |
Pending | November 2010 |
Directed to placental tissue particulates compositions, for use in treating musculoskeletal or orthopedic conditions, methods of treating pain associated with osteoarthritis, kits and methods of making the compositions | MOTYS |
• | design, development and manufacturing; |
• | testing, labeling, content and language of instructions for use and storage; |
• | clinical trials; |
• | product safety; |
• | marketing, sales and distribution; |
• | premarket clearance and approval; |
• | record keeping procedures; |
• | advertising and promotion; |
• | recalls and field safety corrective actions; |
• | postmarket surveillance, including reporting of deaths or serious injuries and malfunctions that, if they were to recur, could lead to death or serious injury; |
• | postmarket approval studies; and |
• | product import and export. |
• | QSRs, which requires manufacturers to follow design, testing, control, documentation and other quality assurance procedures during the manufacturing process; |
• | Establishment Registration, which requires establishments involved in the production and distribution of medical devices, intended for commercial distribution in the United States, to register with the FDA; |
• | Medical Device Listing, which requires manufacturers to list the devices they have in commercial distribution with the FDA; |
• | Labeling regulations, which prohibit “misbranded” devices from entering the market, as well as prohibit the promotion of products for unapproved or off-label uses and impose other restrictions on labeling; |
• | Postmarket surveillance, including Medical Device Reporting (MDR) requirements which requires manufacturers to report to the FDA if their device may have caused or contributed to a death or serious injury, or malfunctioned in a way that would likely cause or contribute to a death or serious injury if it were to recur; and |
• | Corrections and Removal Reporting regulations, which require that manufacturers report to the FDA field corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the United States Federal Food, Drug, and Cosmetic Act (FDCA) that may present a risk to health. |
• | untitled letters or warning letters; |
• | fines, injunctions and civil penalties; |
• | mandatory recall or seizure of its products; |
• | administrative detention or banning of its products; |
• | operating restrictions, partial suspension or total shutdown of production; |
• | refusing its request for 510(k) clearances or PMA approvals for new product versions; |
• | revocation of 510(k) clearances or PMA approvals previously granted; and |
• | criminal prosecution and penalties. |
• | completion of extensive preclinical laboratory tests and animal studies performed in accordance with applicable regulations, including the FDA’s Good Laboratory Practice (GLP), regulations; |
• | submission to the FDA of an IND which must become effective before clinical trials may begin; |
• | approval by an independent institutional review board, or IRB, or ethics committee at each clinical site before the trial is commenced; |
• | performance of adequate and well-controlled human clinical trials to establish the safety and effectiveness of the proposed drug candidate and the safety, purity and potency of the proposed biologic product candidate for its intended purpose; |
• | preparation of and submission to the FDA of an New Drug Application (NDA) or BLA after completion of all pivotal clinical trials; |
• | satisfactory completion of an FDA Advisory Committee review, if applicable; |
• | a determination by the FDA within 60 days of its receipt of a NDA or BLA to file the application for review; |
• | satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the proposed product is produced to assess compliance with cGMP requirements, and to assure that the facilities, methods and controls are adequate to preserve the product’s safety and effectiveness, and of selected clinical investigation sites to assess compliance with GCPs; and |
• | FDA review and approval of a NDA or BLA to permit commercial marketing of the product for particular indications for use in the United States. |
• | Phase 1 |
• | Phase 2 |
• | Phase 3 |
• | restrictions on the marketing or manufacturing of a product, complete withdrawal of the product from the market or product recalls; |
• | fines, warning or untitled letters or holds on post-approval clinical studies; |
• | refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of existing product approvals; |
• | product seizure or detention, or refusal of the FDA to permit the import or export of products; |
• | consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs; |
• | mandated modification of promotional materials and labeling and the issuance of corrective information; |
• | the issuance of safety alerts, Dear Healthcare Provider letters, press releases and other communications containing warnings or other safety information about the product; or |
• | injunctions or the imposition of civil or criminal penalties. |
• | strengthen the rules on placing devices on the market and reinforce surveillance once they are available; |
• | establish explicit provisions on manufacturers’ responsibilities for the follow-up on the quality, performance and safety of devices placed on the market; |
• | improve the traceability of medical devices throughout the supply chain to the end-user or patient through a unique identification number; |
• | set up a central database to provide patients, healthcare professionals and the public with comprehensive information on products available in the EU; and |
• | strengthen rules for the assessment of certain high-risk devices, such as implants, which may have to undergo an additional check by experts before they are placed on the market. |
• | the timing of any subsequent redemptions or exchanges— |
• | the price of shares of our Class A common stock at the time of redemptions or exchanges |
• | the extent to which such redemptions or exchanges are taxable— |
• | the amount and timing of our income— |
• | Pain Treatments and Joint Preservation includes the legacy osteoarthritis (OA) joint pain treatment and joint preservation products, plus the Peripheral Nerve Stimulation (PNS) products sold previously by Bioness. |
• | Bone Graft Substitutes (BGS) is comprised of human tissue allograft and synthetic products used primarily in spine surgery; and |
• | Restorative Therapies includes the legacy minimally invasive fracture treatments, plus the rehabilitation products sold previously by Bioness. |
Years Ended December 31, |
Six Months Ended |
|||||||||||||||
2020 |
2019 |
July 3, 2021 |
June 27, 2020 |
|||||||||||||
Net sales |
$ | 321,161 | $ | 340,141 | $ | 191,594 | $ | 136,662 | ||||||||
Net income from continuing operations |
$ | 14,722 | $ | 8,113 | $ | 13,748 | $ | 4,506 | ||||||||
Adjusted EBITDA(1) |
$ | 72,443 | $ | 79,188 | $ | 30,957 | $ | 21,188 | ||||||||
Net income (loss) per unit attributable to common unit holders - basic and diluted(2) |
$ | 0.89 | $ | (0.13 | ) |
(1) | See below under Components of Bioventus’ results of operations-Adjusted EBITDA Results from continuing operations |
(2) | See below for a computation of pro forma net income per unit attributable to common unit holders - basic and diluted after the recapitalization described below which was in conjunction with Bioventus’ IPO. |
2020 |
2019 |
|||||||
Net income from continuing operations attributable to common unit holders |
$ | 16,411 | $ | 8,666 | ||||
Loss from discontinued operations, net of tax |
— | 1,815 | ||||||
|
|
|
|
|||||
Net income attributable to common unit holders |
$ | 16,411 | $ | 6,851 | ||||
|
|
|
|
|||||
Pro forma net income per unit attributable to common unit holders—basic and diluted |
||||||||
Pro forma net income from continuing operations |
$ | 0.29 | $ | 0.15 | ||||
Pro forma loss from discontinued operations, net of tax |
— | 0.03 | ||||||
|
|
|
|
|||||
Pro forma net income attributable to common unit holders |
$ | 0.29 | $ | 0.12 | ||||
|
|
|
|
|||||
Pro forma weighted average units used in computing basic and diluted net income per common unit |
56,825,325 | 56,825,325 |
• | continue to expand market share in HA viscosupplementation; |
• | introduce new pain treatment and joint preservation products; |
• | further develop and commercialize Bioventus’ BGS portfolio; |
• | expand indications for use for Bioventus’ Exogen system; |
• | invest in research and development; |
• | pursue business development opportunities; and |
• | opportunistically grow Bioventus’ international markets. |
Six Months Ended |
||||||||
July 3, 2021 |
June 27, 2020 |
|||||||
Net sales |
100.0 | % | 100.0 | % | ||||
Cost of sales (including depreciation and amortization) |
29.1 | % | 28.6 | % | ||||
Gross profit |
70.9 | % | 71.4 | % | ||||
Selling, general and administrative expense |
54.1 | % | 59.1 | % | ||||
Research and development expense |
3.0 | % | 3.5 | % | ||||
Change in fair value of contingent consideration |
0.3 | % | — | % | ||||
Depreciation and amortization |
2.0 | % | 2.7 | % | ||||
Impairment of variable interest entity assets |
3.0 | % | — | % | ||||
Operating (loss) income |
8.5 | % | 6.1 | % |
Six Months Ended |
||||||||
(in thousands) |
July 3, 2021 |
June 27, 2020 |
||||||
Net (loss) income |
$ |
13,748 |
$ |
4,506 |
||||
Depreciation and amortization (a) |
14,663 | 14,513 | ||||||
Income tax expense (benefit) |
1,641 | (71 | ) | |||||
Interest expense (income) |
(1,195 | ) | 5,215 | |||||
Equity compensation (b) |
(16,559 | ) | (6,771 | ) | ||||
COVID-19 benefits, net(c) |
— | (1,101 | ) | |||||
Succession and transition charges (d) |
344 | 4,574 | ||||||
Foreign currency impact (e) |
(64 | ) | 40 | |||||
Acquisition and integration costs (f) |
5,029 | — | ||||||
Inventory step-up costs(g) |
2,106 | — | ||||||
Equity loss in unconsolidated investments (h) |
901 | — | ||||||
Change in fair value of contingent consideration (i) |
641 | — | ||||||
Impairments related to variable interest entity (j) |
7,043 | — | ||||||
Other non-recurring costs(k) |
2,659 | 283 | ||||||
|
|
|
|
|||||
Adjusted EBITDA |
$ |
30,957 |
$ |
21,188 |
||||
|
|
|
|
(a) |
Includes for the six months ended July 3, 2021 and June 27, 2020, respectively, depreciation and amortization of $10,854 and $10,599 in cost of sales, and $3,777 and $3,638 presented in the consolidated statements of operations and comprehensive (loss) income with the balance in research and development. |
(b) |
The six months ended July 3, 2021 primarily includes equity-based compensation expense (income) resulting from awards granted under the Company’s current equity based compensation plan (2021 Plan) and compensation costs. The six months ended July 3, 2021 also includes the change in fair market value of accrued equity-based compensation related to the BV LLC Phantom Profits Interest Plan (Phantom Plan) due to expected pricing with Bioventus’ IPO. Equity compensation expenses for the six months ended June 27, 2020 represents compensation from the Company’s management incentive plan and Phantom Plan as well as the change in fair market value of accrued equity-based compensation related to the plans due to the impact of the COVID-19 pandemic on Bioventus’ business. |
(c) |
Represents income resulting from the CARES Act offset by additional cleaning and disinfecting expenses and contract termination fees for canceled events. |
(d) |
Primarily represents costs related to the CEO transition. |
(e) |
Foreign currency impact represents realized and unrealized gains and losses from fluctuations in foreign currency and is included within other expense (income) in the consolidated statements of operations and comprehensive (loss) income. |
(f) |
Represents costs incurred to acquire and integrate Bioness. |
(g) |
Amortization of the inventory step-up associated with the Bioness acquisition. |
(h) |
Represents CartiHeal equity investment losses. |
(i) |
Represents change in fair value of contingent consideration resulting from the Bioness Acquisition. |
(j) |
Represents loss on impairment of Harbor’s long-lived assets and the Company’s investment in Harbor. |
(k) |
Other non-recurring costs primarily includes charges associated with strategic transactions, such as potential acquisitions and public company preparation costs, primarily accounting and legal fees. |
Six Months Ended |
Change |
|||||||||||||||
(in thousands, except for percentage) |
July 3, 2021 |
June 27, 2020 |
$ |
% |
||||||||||||
U.S. |
173,220 | $ | 125,136 | $ | 48,084 | 38.4 | % | |||||||||
International |
18,374 | 11,526 | 6,848 | 59.4 | % | |||||||||||
|
|
|
|
|
|
|||||||||||
Net Sales |
$ | 191,594 | $ | 136,662 | $ | 54,932 | 40.2 | % | ||||||||
|
|
|
|
|
|
• Pain Treatments and Joint Preservation |
$ | 24.3 million | ||
• Bone Graft Substitutes |
$ | 13.7 million | ||
• Restorative Therapies |
$ | 10.1 million |
Six Months Ended |
Change |
|||||||||||||||
(in thousands, except for percentage) |
July 3, 2021 |
June 27, 2020 |
$ |
% |
||||||||||||
U.S. |
$ | 123,429 | $ | 90,014 | $ | 33,415 | 37.1 | % | ||||||||
International |
12,440 | 7,571 | 4,869 | 64.3 | % | |||||||||||
|
|
|
|
|
|
|||||||||||
$ | 135,869 | $ | 97,585 | $ | 38,284 | |||||||||||
|
|
|
|
|
|
Gross margin |
Six Months Ended |
|||||||||||
July 3, 2021 |
June 27, 2020 |
Change |
||||||||||
U.S. |
71.3 | % | 71.9 | % | (0.6 | )% | ||||||
International |
67.7 | % | 65.7 | % | 2.0 | % | ||||||
Total |
70.9 | % | 71.4 | % | (0.5 | )% |
Six Months Ended |
Change |
|||||||||||||||
(in thousands, except for percentage) |
July 3, 2021 |
June 27, 2020 |
$ |
% |
||||||||||||
Selling, general and administrative expense |
$ | 103,736 | $ | 80,809 | $ | 22,927 | 28.4 | % |
• Compensation related expenses |
$ | 19.0 million | ||
• Equity compensation excluding change in the fair value discussed further below |
$ | 6.6 million | ||
• Consulting expense |
$ | 5.4 million | ||
• Corporate and employee health insurance |
$ | 3.7 million | ||
• Legal and accounting expenses |
$ | 3.3 million |
Six Months Ended |
Change |
|||||||||||||||
(in thousands, except for percentage) |
July 3, 2021 |
June 27, 2020 |
$ |
% |
||||||||||||
Research and development expense |
5,783 | 4,742 | $ | 1,041 | 22.0 | % |
Six Months Ended |
Change |
|||||||||||||||
(in thousands, except for percentage) |
July 3, 2021 |
June 27, 2020 |
$ |
% |
||||||||||||
Depreciation and amortization |
3,777 | 3,638 | $ | 139 | 3.8 | % |
Six Months Ended |
Change |
|||||||||||||||
(in thousands, except for percentage) | July 3, 2021 |
June 27, 2020 |
$ |
% |
||||||||||||
Interest expense (income) |
$ | (1,195 | ) | $ | 5,215 | $ | (6,410 | ) | NM | |||||||
Other expense (income) |
$ | 2,064 | $ | (1,254 | ) | $ | 3,318 | NM |
Six Months Ended |
Change |
|||||||||||||||
(in thousands, except for percentage) | July 3, 2021 |
June 27, 2020 |
$ |
% |
||||||||||||
Income tax expense (benefit) |
$ | 1,641 | $ | (71 | ) | $ | 1,712 | NM | ||||||||
Effective tax rate |
10.7 | % | 1.6 | % | 9.1 | % |
Six Months Ended |
Change |
|||||||||||||||
July 3, 2021 |
June 27, 2020 |
$ |
% |
|||||||||||||
Continuing LLC Owner |
$ | 1,397 | $ | — | $ | 1,397 | NM | |||||||||
Harbor |
5,665 | 672 | 4,993 | NM | ||||||||||||
|
|
|
|
|
|
|||||||||||
Total |
$ | 7,062 | $ | 672 | $ | 6,390 | ||||||||||
|
|
|
|
|
|
Six Months Ended |
Change |
|||||||||||||||
(in thousands, except for percentage) |
July 3, 2021 |
June 27, 2020 |
$ |
% |
||||||||||||
U.S. |
$ | 27,147 | $ | 21,151 | $ | 5,996 | 28.3 | % | ||||||||
International |
$ | 3,810 | $ | 37 | $ | 3,773 | NM |
Years Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Net sales |
100.0 | % | 100.0 | % | ||||
Cost of sales (including depreciation and amortization) |
27.3 | % | 26.7 | % | ||||
|
|
|
|
|||||
Gross profit |
72.7 | % | 73.3 | % | ||||
Selling, general and administrative expense |
60.1 | % | 58.3 | % | ||||
Research and development expense |
3.5 | % | 3.3 | % | ||||
Restructuring costs |
0.2 | % | 0.2 | % | ||||
Depreciation and amortization |
2.3 | % | 2.3 | % | ||||
|
|
|
|
|||||
Operating income |
6.6 | % | 9.2 | % | ||||
|
|
|
|
Years Ended December 31, |
||||||||
(in thousands) |
2020 |
2019 |
||||||
Net income from continuing operations |
$ | 14,722 | $ | 8,113 | ||||
Depreciation and amortization(a) |
28,643 | 30,316 | ||||||
Income tax expense |
1,192 | 1,576 | ||||||
Interest expense |
9,751 | 21,579 | ||||||
Equity compensation(b) |
10,103 | 10,844 | ||||||
COVID-19 benefits, net(c) |
(4,123 | ) | — | |||||
Succession and transition charges(d) |
5,609 | — | ||||||
Restructuring costs(e) |
563 | 575 | ||||||
Foreign currency impact(f) |
(117 | ) | 8 | |||||
Equity loss in unconsolidated investments(g) |
467 | — | ||||||
Other non-recurring costs(h) |
5,633 | 6,177 | ||||||
|
|
|
|
|||||
Adjusted EBITDA |
$ | 72,443 | $ | 79,188 | ||||
|
|
|
|
(a) | Includes for the years ended December 31, 2020 and 2019 depreciation and amortization of $21.2 million and $22.4 million in cost of sales and also includes $7.4 million and $7.9 million, respectively, presented in the consolidated statements of operations and comprehensive income (loss), with the balance in research and development. |
(b) | Represents compensation as well as the change in fair market value resulting from two equity-based compensation plans, the MIP and the Phantom Plan. |
(c) | Represents income resulting from the CARES Act offset by additional cleaning and disinfecting expenses and contract termination fees for canceled events. |
(d) | Primarily represents costs related to the CEO transition. |
(e) | Represents costs related to a shift from direct to an indirect distribution model in our International business to improve performance. Various international subsidiaries were dissolved and or merged into other BV LLC entities. |
(f) | Foreign currency impact represents realized and unrealized gains and losses from fluctuations in foreign currency and is included within other (income) loss in the consolidated statements of operations and comprehensive income (loss). |
(g) | Represents our share in the losses of CartiHeal for the year ended December 31, 2020. |
(h) | Other non-recurring items in 2020 includes settlement and legal costs of $1.9 million with the OIG. The remaining activities in 2020 and the balance in 2019 are primarily comprised of charges associated with potential strategic transactions, such as potential acquisitions and preparing to become a public company, primarily accounting and legal fees. |
Years Ended December 31, |
Change |
|||||||||||||||
(in thousands, except for percentage) | 2020 |
2019 |
$ |
% |
||||||||||||
U.S. |
$ | 293,697 | $ | 305,072 | $ | (11,375 | ) | (3.7 | %) | |||||||
International |
27,464 | 35,069 | (7,605 | ) | (21.7 | %) | ||||||||||
|
|
|
|
|
|
|||||||||||
Net Sales |
$ | 321,161 | $ | 340,141 | $ | (18,980 | ) | (5.6 | %) | |||||||
|
|
|
|
|
|
• Minimally invasive fracture treatment |
($ | 11.5) million | ||
• OA joint pain treatment and joint restoration |
($ | 6.3) million | ||
• Bone graft substitutes |
$ | 6.4 million |
Years Ended December 31, |
Change |
|||||||||||||||
(in thousands, except for percentage) | 2020 |
2019 |
$ |
% |
||||||||||||
Gross profit |
||||||||||||||||
U.S. |
$ | 214,572 | $ | 224,957 | $ | (10,385 | ) | (4.6 | %) | |||||||
International |
18,947 | 24,249 | (5,302 | ) | (21.9 | %) | ||||||||||
|
|
|
|
|
|
|||||||||||
Total |
$ | 233,519 | $ | 249,206 | $ | (15,687 | ) | (6.3 | %) | |||||||
|
|
|
|
|
|
Years Ended December 31, |
Change |
|||||||||||
2020 |
2019 |
|||||||||||
Gross margin |
||||||||||||
U.S. |
73.1 | % | 73.7 | % | (0.6 | %) | ||||||
International |
69.0 | % | 69.1 | % | (0.1 | %) | ||||||
Consolidated |
72.7 | % | 73.3 | % | (0.6 | %) |
Years Ended December 31, |
Change |
|||||||||||||||
(in thousands, except for percentage) | 2020 |
2019 |
$ |
% |
||||||||||||
Selling, general and administrative expense |
$ | 193,078 | $ | 198,475 | $ | (5,397 | ) | (2.7 | %) |
• COVID-19 related decreases, including declines in travel and meetings from doing business virtually, lower compensation related expenses as well as various cost-reduction initiatives |
$ | 9.3 million | ||
• Lower legal and accounting expenses, which were higher in 2019 due to the OIG matter discussed in Note 12. Commitment and contingencies |
$ | 5.8 million |
• Succession and transition charges associated with the transition to our new Chief Executive Officer |
$ | 5.6 million | ||
• Costs and services related to strategic transactions, product recall expenses and other non-recurring charges |
$ | 4.1 million |
Years Ended December 31, |
Change |
|||||||||||||||
(in thousands, except for percentage) | 2020 |
2019 |
$ |
% |
||||||||||||
Research and development expense |
$ | 11,202 | $ | 11,055 | $ | 147 | 1.3 | % |
Years Ended December 31, |
Change |
|||||||||||||||
(in thousands, except for percentage) | 2020 |
2019 |
$ |
% |
||||||||||||
Depreciation and amortization |
$ | 7,439 | $ | 7,908 | $ | (469 | ) | (5.9 | %) |
Years Ended December 31, |
Change |
|||||||||||||||
(in thousands, except for percentage) | 2020 |
2019 |
$ |
% |
||||||||||||
Interest expense |
$ | 9,751 | $ | 21,579 | $ | (11,828 | ) | (54.8 | %) | |||||||
Other (income) loss |
$ | (4,428 | ) | $ | (75 | ) | $ | (4,353 | ) | NM |
Years Ended December 31, |
Change |
|||||||||||||||
(in thousands, except for percentage) | 2020 |
2019 |
$ |
% |
||||||||||||
Income tax expense |
$ | 1,192 | $ | 1,576 | $ | (384 | ) | (24.4 | %) | |||||||
Effective tax rate |
7.5 | % | 16.3 | % | (8.8 | %) |
Years Ended December 31, |
Change |
|||||||||||||||
(in thousands, except for percentage) | 2020 |
2019 |
$ |
% |
||||||||||||
U.S. |
$ | 69,252 | $ | 71,673 | $ | (2,421 | ) | (3.4 | %) | |||||||
International |
$ | 3,191 | $ | 7,515 | $ | (4,324 | ) | (57.5 | %) |
Six Months Ended |
Change |
|||||||||||||||
(in thousands) |
July 3, 2021 |
June 27, 2020 |
$ |
% |
||||||||||||
Net cash from operating activities |
$ | (713 | ) | $ | 25,511 | $ | (26,224 | ) | (102.8 | )% | ||||||
Net cash from investing activities - continuing operations |
(49,296 | ) | (1,202 | ) | (48,094 | ) | NM | |||||||||
Net cash from financing activities |
101,409 | 37,425 | 63,984 | 171.0 | % | |||||||||||
Net cash from discontinued operations |
— | 172 | (172 | ) | (100.0 | )% | ||||||||||
Effect of exchange rate changes on cash |
(171 | ) | (186 | ) | 15 | (8.1 | )% | |||||||||
|
|
|
|
|
|
|||||||||||
Net change in cash, cash equivalents and restricted cash |
$ | 51,229 | $ | 61,720 | $ | (10,491 | ) | (17.0 | )% | |||||||
|
|
|
|
|
|
• | Compensation and annual incentive plan payments increased $14.9 million during 2021; |
• | Completed and potential acquisition expenses increased in 2021 as well as other nonrecurring costs of $8.3 million; |
• | Larger net settlements in 2021 with the sole MIP awardee of $4.3 million; |
• | Tax payments increased $5.9 million during 2021; |
• | Larger directors and officers annual insurance premiums in 2021 for $4.6 million; |
• | Settlement of Bioventus’ EPR liability for $3.3 million occurred in 2021 and; |
• | Higher inventory purchases during 2021 of $2.9 million. |
• | An increase of $21.4 million in net collections during 2021, primarily due to the economic impact of COVID-19 during 2020. |
Years Ended December 31, |
Change |
|||||||||||||||
(in thousands, except for percentage) | 2020 |
2019 |
$ |
% |
||||||||||||
Consolidated statement of cash flow data: |
||||||||||||||||
Net cash provided by (used in): |
||||||||||||||||
Operating activities from continuing operations |
$ | 72,199 | $ | 42,545 | $ | 29,654 | 69.7 | % | ||||||||
Investing activities from continuing operations |
(20,672 | ) | (7,912 | ) | (12,760 | ) | 161.3 | % | ||||||||
Financing activities |
(29,569 | ) | (10,951 | ) | (18,618 | ) | 170.0 | % | ||||||||
Discontinued operations |
(228 | ) | (1,832 | ) | 1,604 | (87.6 | )% | |||||||||
Effect of exchange rate changes on cash and cash equivalents |
589 | (104 | ) | 693 | NM | |||||||||||
|
|
|
|
|
|
|||||||||||
Net change in cash and cash equivalents |
$ | 22,319 | $ | 21,746 | $ | 573 | ||||||||||
|
|
|
|
|
|
Payments Due by Period |
||||||||||||||||||||
Contractual Obligations (in thousands) |
Less than 1 year |
1-3 Years |
3-5 Years |
More than 5 years |
Total |
|||||||||||||||
Long-term debt obligations |
$ | 15,000 | $ | 35,000 | $ | 140,000 | $ | — | $ | 190,000 | ||||||||||
Interest on long-term debt obligations |
4,606 | 8,073 | 3,139 | — | 15,818 | |||||||||||||||
Operating lease obligations |
1,960 | 3,955 | 4,232 | 5,921 | 16,068 | |||||||||||||||
Purchase obligations |
19,655 | 25,920 | 25,920 | — | 71,495 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
$ | 41,221 | $ | 72,948 | $ | 173,291 | $ | 5,921 | $ | 293,381 | |||||||||||
|
|
|
|
|
|
|
|
|
|
• | commitments under its multi-year exclusive supply agreements for its OA products except for those amounts that are contractually committed as of December 31, 2020. Bioventus’ purchase obligations under these supply agreements are generally based upon its forecasted requirements, subject in some cases to a contractual minimum per annum; |
• | commitments under the Development Agreement with MTF, the Option and Equity Purchase Agreement with CartiHeal and its shareholders and the Collaboration Agreement with Harbor, for which the relevant contingent events requiring a payment under the respective agreements have not yet occurred; and |
• | future milestone payments pursuant to the Development Agreement with MTF, the Option and Equity Purchase Agreement with CartiHeal and its shareholders, the Collaboration Agreement with Harbor and the amended and restated license agreement, or the Q-Med License Agreement, with Q-Med and NSH, as the |
payment obligations under these agreements are contingent upon future events and Bioventus is unable to estimate the timing or likelihood of achieving these milestones or generating future product sales. |
• | Expected volatility—Bioventus determines the expected price volatility based on the historical volatilities of its peer group, as Bioventus does not have a sufficient trading history for its units. Industry peers consist of several public companies in the medical device industry similar to Bioventus in size, stage of life cycle and financial leverage. Bioventus intends to continue to consistently apply this process using the same or similar public companies until a sufficient amount of historical information regarding the volatility of its own stock price becomes available, or unless circumstances change such that the identified companies are no longer similar to us, in which case, more suitable companies whose share prices are publicly available would be utilized in the calculation. |
• | Time to liquidity event—The amount of time that the awards are expected to be outstanding. |
• | Risk-free interest rate—Bioventus based the risk-free rate on U.S. Government Constant Maturity Treasury rates for a term corresponding to the Time to Liquidity Event. |
• | Expected dividend yield—Bioventus used a dividend rate of zero as it has not previously issued dividends and do not anticipate paying dividends in the foreseeable future. |
2020 |
2019 |
|||||||
Expected dividend yield |
0.0 | % | 0.0 | % | ||||
Expected volatility |
50.0 | % | 35.0 | % | ||||
Risk-free interest rate |
0.1 | % | 1.5 | % | ||||
Time to exit event (in years) |
0.4 | 1.5 |
• | the nature and history of its business; |
• | Bioventus’ historical operating and financial results; |
• | the market value of companies that are engaged in a similar business to Bioventus’; |
• | the lack of marketability of its common stock; |
• | the overall inherent risks associated with its business at the time awards were approved; and |
• | the overall equity market conditions and general economic trends. |
Computer software and hardware |
3-5 |
|||
Leasehold improvements |
7 | |||
Machinery and equipment |
7 | |||
Furniture and fixtures |
7 |
Weighted Average Useful Life |
||||
Intellectual property |
17.3 | |||
Distribution rights |
12.7 | |||
Customer relationships |
10 | |||
Developed technology |
8.3 |
• | The last day of its fiscal year following the fifth anniversary of the date of its IPO; |
• | The last day of its fiscal year in which have annual gross revenues of $1.07 billion or more; |
• | The date on which Bioventus has, during the previous three-year period, issued more than $1.0 billion in non-convertible debt; |
• | The date on which Bioventus is deemed to be a “large accelerated filer”, which will occur at such time as Bioventus (1) has an aggregate worldwide market value of common equity securities held by non-affiliates of $700 million or more as of the last business day of its most recently completed second quarter, (2) have been required to file annual and quarterly reports under the Exchange Act for a period of at least 12 months and (3) have filed at least one annual report pursuant to the Exchange Act. |
• | Kenneth M. Reali, Chief Executive Officer; |
• | Gregory O. Anglum, Senior Vice President & Chief Financial Officer; |
• | John E. Nosenzo, Senior Vice President & Chief Commercial Officer; |
• | Anthony D’Adamio, Senior Vice President & General Counsel; |
• | Alessandra Pavesio, Senior Vice President & Chief Science Officer; and |
• | Anthony P. Bihl III, former Chief Executive Officer. |
Name and Principal Position |
Year |
Salary ($) (1) |
Bonus ($) |
Stock Awards ($) (7) |
Option Awards ($) (8) |
Non-Equity Incentive Plan Compensation ($) (5) |
All Other Compensation ($) (6) |
Total ($) |
||||||||||||||||||||||||
Kenneth M. Reali |
2020 | $ | 428,135 | $ | 9,282 | (2) | $ | 4,111,191 | $ | 38,631 | $ | 426,634 | $ | 277,719 | $ | 5,291,592 | ||||||||||||||||
Chief Executive Officer |
2019 | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Gregory O. Anglum |
2020 | 381,044 | 2,793 | (2) | — | — | 178,471 | 22,392 | 584,700 | |||||||||||||||||||||||
Senior Vice President & Chief Financial Officer |
2019 | 374,019 | — | — | — | 143,479 | 22,386 | 539,884 | ||||||||||||||||||||||||
John E. Nosenzo |
2020 | 504,893 | 21,778 | (3) | — | — | 357,646 | 22,959 | 907,277 | |||||||||||||||||||||||
Senior Vice President & Chief Commercial Officer |
2019 | 490,219 | — | — | — | 295,322 | 22,584 | 808,125 | ||||||||||||||||||||||||
Anthony D’Adamio |
2020 | 396,597 | 3,062 | (2) | — | — | 195,674 | 22,959 | 618,292 | |||||||||||||||||||||||
Senior Vice President & General Counsel |
2019 | 391,106 | — | — | — | 150,016 | 22,584 | 563,706 | ||||||||||||||||||||||||
Alessandra Pavesio |
2020 | 408,657 | 3,267 | (4) | — | — | 201,652 | 21,375 | 634,951 | |||||||||||||||||||||||
Senior Vice President & Chief Science Officer |
2019 | 398,165 | — | — | — | 160,693 | 21,000 | 579,858 | ||||||||||||||||||||||||
Anthony P Bihl III |
2020 | 236,750 | — | — | — | 214,111 | 3,639,984 | 4,090,845 | ||||||||||||||||||||||||
Former Chief Executive Officer |
2019 | 684,979 | — | — | — | 552,910 | 23,561 | 1,261,450 |
(1) | Amounts reflect annual base salary earned with respect to 2019 and 2020. |
(2) | Amounts reflect discretionary “make whole” bonuses paid to all employees who earned performance-based cash incentives under the 2020 Annual Incentive Plan in amounts equal to the additional cash incentives that would have otherwise been paid under such plan had salaries not been reduced in connection with the COVID-19 pandemic, as described below under “—2020 Salaries”. |
(3) | Amount reflects a discretionary “make whole” bonus paid to Mr. Nosenzo in respect of his performance-based cash incentive under the 2020 Executive Annual Incentive Plan – Chief Commercial Officer in an amount equal to (i) the additional cash incentive that he would have otherwise been paid under such plan had his salary not been reduced in connection with the COVID-19 pandemic, as described below under “—2020 Salaries” and (ii) in recognition of his sales efforts during the COVID-19 pandemic, the additional cash incentive that he would have been paid had he been a participant in the 2020 Executive Annual Incentive Plan – Non Commercial. |
(4) | Amount reflects (i) a $3,167 discretionary “make whole” bonus paid to Ms. Pavesio in respect of her performance-based cash incentive under the 2020 Executive Annual Incentive Plan – Non Commercial in an amount equal to the additional cash incentive that she would have otherwise been paid under such plan had her salary not been reduced in connection with the COVID-19 pandemic, as described below under “—2020 Salaries”, and (ii) $100 bonus paid to Ms. Pavesio in connection with a CEO determination to pay $100 discretionary bonuses to all employees with five through nine years of service. |
(5) | Amounts reflect the annual performance-based cash incentives earned by our named executive officers in 2019 and 2020 based on achievement of corporate and personal performance objectives as set forth in the 2019 and 2020 Executive Annual Incentive Plan – Non Commercial or the 2019 and 2020 Executive Annual Incentive Plan – Chief Commercial Officer, as applicable. |
(6) | 2020 amounts reflect (i) $8,550, $8,550, $8,550, $8,550, $8,550, and $8,550 in matching 401(k) contributions made by us to the 401(k) accounts of Messrs. Reali, Anglum, Nosenzo, D’Adamio, Ms. Pavesio and Mr. Bihl, respectively, (ii) additional fixed non-elective contributions of $1,064, $12,402, $12,825, $12,825, $12,825, and $12,825 made by us to the 401(k) accounts of Messrs. Reali, Anglum, Nosenzo, D’Adamio, Ms. Pavesio and Mr. Bihl, respectively, (iii) reimbursement of cellular telephone expenses to Messrs. Reali, Anglum, Nosenzo, and D’Adamio equal to $1,056, $1440, $1,584 and $1,584, respectively, (iv) relocation allowance of $250,000 and tax gross up of $17,048 to Mr. Reali, (v) payments to Mr. Bihl of a $4,966 benefit stipend and $63,700 tax stipend in connection with his status as a partner and associated receipt of a guaranteed payment instead of a salary, and (vi) payments made to Mr. Bihl in connection with his retirement in an aggregate amount of $3,549,943 to reflect the COVID-19-related |
2019 amounts reflect (i) $2,561 benefit stipend to Mr. Bihl (ii) $8,400, $8,400, $8,400, $8,400 and $8,400 in matching 401(k) contributions made by us to the 401(k) accounts of Messrs. Anglum, Nosenzo, D’Adamio, Ms. Pavesio and Mr. Bihl, respectively, (iii) additional fixed non-elective contributions of $12,600, $12,600, $12,600, $12,600 and $12,600 made by us to the 401(k) accounts of Messrs. Anglum, Nosenzo, D’Adamio, Ms. Pavesio and Mr. Bihl, respectively, and (iv) reimbursement of cellular telephone expenses to Messrs. Anglum, Nosenzo, and D’Adamio equal to $1,386, $1,584 and $1,584, respectively. |
(7) | Amount reflects the aggregate grant date fair value of phantom profits interests granted to Mr. Reali during the year ended December 31, 2020 computed in accordance with FASB ASC Topic 718, Compensation—Stock Compensation. Refer to Note 9. Equity-based compensation Part II, Item 8. Financial Statements and Supplementary Data |
(8) | Amount reflects the aggregate grant date fair value of options granted to Mr. Reali during the year ended December 31, 2020 computed using a Black-Scholes calculation in accordance with FASB ASC Topic 718, Compensation—Stock Compensation. |
• | options to purchase 4,561,500 shares of Class A common stock that vest between two and four years from February 11, 2021 and |
• | restricted stock unit (RSU) awards for 293,170 and 67,500 to employees and non-employee directors, respectively, of shares of Class A common stock released between one and four years from February 11, 2021 |
• | medical, dental and vision benefits; |
• | medical flexible spending accounts and health savings account; |
• | short-term and long-term disability insurance; |
• | basic life and accidental death & dismemberment insurance; and |
• | group accident, critical illness and hospital indemnity plans. |
Option Awards (5) |
Stock Awards |
|||||||||||||||||||||||
Name |
Grant Date |
Number of securities underlying unexercised options (#) exercisable |
Number of securities underlying unexercised options (#) unexercisable |
Option Exercise Price ($) |
Option Expiration Date |
Number of profits interest units (including profits interest units underlying phantom units (1) that have notvested (2) (#) |
Market Value (3) ofprofits interest units (including profits interest units underlying phantom units) that have not vested ($) |
|||||||||||||||||
Kenneth Reali |
4/13/2020 |
417,804 |
(4) |
$ | 7,716,840 | |||||||||||||||||||
7/30/2020 |
5,935 |
— |
$ | 42.12 | 7/30/2021 |
|||||||||||||||||||
Gregory O. Anglum |
04/04/2016 | 2,000 | (6) |
94,300 | ||||||||||||||||||||
05/01/2017 | 28,500 | (6) |
1,257,420 | |||||||||||||||||||||
9/17/2018 | 20,000 | (6) |
580,600 | |||||||||||||||||||||
John E. Nosenzo |
02/06/2017 | 31,250 | (7) |
1,378,750 | ||||||||||||||||||||
9/17/2018 | 25,000 | (7) |
725,750 | |||||||||||||||||||||
Anthony D’Adamio |
8/14/2017 | 14,000 | (8) |
617,680 | ||||||||||||||||||||
9/17/2018 | 15,000 | (8) |
435,450 | |||||||||||||||||||||
Alessandra Pavesio |
9/17/2018 | 20,000 | (9) |
580,600 |
(1) | The Phantom Units do not have an expiration date; provided that any Phantom Units granted on September 17, 2018 that do not vest as a result of achieving 2020 revenue targets on June 1, 2021 will expire. |
(2) | This column shows the number of profits interest units held by Mr. Bihl and the number of Phantom Units held by our other named executive officers that have not vested. Phantom Units generally represent the right to receive cash amounts from us based on the distributions that would be made to an equivalent number of profits interests with an equivalent benchmark amount. The benchmark amounts represent the cumulative distributions that must be made by us pursuant to the Bioventus LLC Agreement before a grantee is entitled to receive any distributions or payments in respect of such grantee’s units. The benchmark amount for Mr. Anglum’s 2016 grant of Phantom Units is $472,003,000, for Messrs. Nosenzo, Anglum, and D’Adamio’s 2017 grant is $510,000,000, for Messrs. Anglum, Nosenzo and D’Adamio’s and Ms. Pavesio’s 2018 grant of Phantom Units is $703,691,178, and for Mr. Reali’s 2020 grant of Phantom Units on June 25, 2020 is $840,849,878. |
(3) | Market value is determined based on an independent valuation report on the fair market value of the Company. |
(4) | Mr. Reali was granted 417,804 Phantom Units on June 25, 2020; 20% of such grant will vest on April 13, 2021 and 5% will vest each quarter thereafter. |
(5) | Mr. Reali was granted 5,935 options to purchase equity interests of BV LLC on July 30, 2020, all of which were fully vested and exercisable at the time of grant. |
(6) | Mr. Anglum was granted 20,000 Phantom Units on April 4, 2016 and 95,000 Phantom Units on May 1, 2017; 20% of each grant vested on the first anniversary of the grant date and 5% vests each quarter thereafter. Mr. Anglum was also granted 20,000 Phantom Units on September 17, 2018; these units will vest on June 1, 2021 at 100% if 2020 revenue is greater than or equal to $391.8 million and at 75% if 2020 revenue is greater than or equal to $336.0 million. |
(7) | Mr. Nosenzo was granted 125,000 Phantom Units on February 6, 2017; 20% of these Phantom Units vested on February 6, 2018 and 5% vests each quarter thereafter. Mr. Nosenzo was also granted 25,000 Phantom Units on September 17, 2018; these units will vest on June 1, 2021 at 100% if 2020 revenue is greater than or equal to $391.8 million and at 75% if 2020 revenue is greater than or equal to $336.0 million. |
(8) | Mr. D’Adamio was granted 40,000 Phantom Units on August 14, 2017; 20% of such grant vested on the first anniversary of the grant date and 5% vests each quarter thereafter. Mr. D’Adamio was also granted 15,000 Phantom Units on September 17, 2018; these units will vest on June 1, 2021 at 100% if 2020 revenue is greater than or equal to $391.8 million and at 75% if 2020 revenue is greater than or equal to $336.0 million. |
(9) | Ms. Pavesio was granted 20,000 Phantom Units on September 17, 2018; these units will vest on June 1, 2021 at 100% if 2020 revenue is greater than or equal to $391.8 million and at 75% if 2020 revenue is greater than or equal to $336.0 million. Ms. Pavesio was also granted 83,333 Phantom Units on July 22, 2013, 15,000 Phantom Units on June 1, 2015, and 11,392 Phantom Units on April 21, 2016, all of which were fully vested as of December 31, 2020. |
Name |
Year |
Fees Earned or Paid in Cash ($) (1) |
Total ($) (2) |
|||||||
William A. Hawkins (3) |
2020 |
$ | 90,000 | $ | 90,000 | |||||
Susan M. Stalnecker (3) |
2020 | 60,000 | 60,000 | |||||||
Guy P. Nohra |
2020 | — | — | |||||||
Martin P. Sutter |
2020 | — | — | |||||||
Bradley J. Cannon |
2020 | — | — | |||||||
David J. Parker |
2020 | — | — | |||||||
Philip G. Cowdy |
2020 | — | — | |||||||
Guido J. Neels |
2020 | — | — |
(1) | Mr. Hawkins received an annual retainer of $40,000 for his service as a member of the board and an additional annual retainer fee of $50,000 for his service as chairman of the board. Ms. Stalnecker received an annual retainer fee of $50,000 for her service as a member of the board and an additional annual retainer fee of $10,000 for her service on the Audit and Risk Committee of the board. No other members of our board received any cash compensation in 2020. |
(2) | No members of our board received equity compensation awards in 2020. |
(3) | As of December 31, 2020, Mr. Hawkins held 50,000 Phantom Units, 95% of which were vested and 5% of which were unvested, and Ms. Stalnecker held 50,000 Phantom Units, 40% of which were vested and 60% of which were unvested, respectively. The benchmark amount for Mr. Hawkins’s grant of Phantom Units is $472,003,000 and the benchmark amount for Ms. Stalnecker’s grant of Phantom Units is $703,691,178. |
Number of securities to be issued upon exercise of outstanding options and rights (a) |
Weighted- average exercise price of outstanding options and rights (b) |
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected under column (a)) (4) (c) |
||||||||||
Equity compensation plans approved by security holders (1) |
4,922,170 | (2) |
$ | 13.00 | (3) |
3,212,626 | ||||||
Equity compensation plans not approved by security holders |
— | — | — |
(1) | Consists of the Bioventus Inc. 2021 Incentive Award Plan (2021 Plan) and the Bioventus Inc. 2021 Employee Stock Purchase Plan (2021 ESPP). |
(2) | Includes 4,561,500 outstanding options to purchase shares of Bioventus class A common stock and 360,670 outstanding restricted stock units under the 2021 Plan. There were no agreements outstanding to purchase shares of Bioventus class A common stock under the 2021 ESPP. |
(3) | The weighted average exercise price in column (b) does not take into account outstanding restricted stock units, which do not have an exercise price. |
(4) | Includes 2,670,306 shares of Bioventus class A common stock available for future issuance under the 2021 Plan and 542,320 shares of Bioventus class A common stock available for future issuance under the 2021 ESPP. The number of shares of Bioventus class A common stock reserved for issuance under the 2021 Plan will automatically increase on January 1 of each calendar year from January 1, 2022 through January 1, 2031, by that number of shares of Bioventus class A common stock equal to the lesser of (i) 4.5% of the shares of all of the classes of Bioventus class A common stock outstanding on the last day of the immediately preceding fiscal year and (ii) such smaller number of shares of Bioventus class A common stock as determined by the board of directors. The number of shares of Bioventus class A common stock reserved for issuance under the 2021 ESPP will automatically increase on January 1 of each calendar year from January 1, 2022 through January 1, 2031, by that number of shares of Bioventus class A common stock equal to the lesser of (A) 1% of the shares of all of Bioventus class A common stock outstanding on the final day of the immediately preceding calendar year and (B) such smaller number of shares of Bioventus class A common stock as determined by the board of directors. |
• | Kenneth M. Reali, Chief Executive Officer; |
• | Gregory O. Anglum, Senior Vice President & Chief Financial Officer; |
• | John E. Nosenzo, Senior Vice President & Chief Commercial Officer; |
• | Anthony D’Adamio, Senior Vice President & General Counsel; |
• | Alessandra Pavesio, Senior Vice President & Chief Science Officer; |
• | Anthony P. Bihl III, former Chief Executive Officer; and |
• | Katrina Church, Senior Vice President and Chief Compliance Officer. |
• | William A Hawkins III; |
• | Philip G. Cowdy; |
• | Guido J. Neels; |
• | Guy P. Nohra; |
• | David J. Parker; |
• | Susan M. Stalnecker; |
• | Martin P. Sutter; |
• | Mary Kay Ladone; and |
• | Kenneth Reali. |
• | Stavros G. Vizirgianakis, Chief Executive Officer and director; |
• | Joseph P. Dwyer, Chief Financial Officer, Treasurer and Secretary; and |
• | Robert S. Ludecker, Senior Vice President of Global Sales and Marketing. |
• | its named executive officers; |
• | Sharon W. Klugewicz, Chief Operating Officer; and |
• | Jay Waggoner, Senior Vice President of Sales - Wound. |
Name |
Number of Shares Underlying Unexercised Options (#) |
Weighted Average Exercise Price of Options ($) |
Value of Unexercised Options (1) ($) |
|||||||||
Named Executive Officers |
||||||||||||
Stavros G. Vizirgianakis |
450,000 | 14.89 | 5,006,781 | |||||||||
Joseph P. Dwyer |
271,500 | 13.77 | 3,325,655 | |||||||||
Robert S. Ludecker |
307,943 | 11.61 | 4,437,751 | |||||||||
Other Executive Officers |
||||||||||||
Sharon W. Klugewicz |
72,000 | 18.02 | 576,124 | |||||||||
Jay Waggoner |
53,000 | 16.06 | 528,000 | |||||||||
Non-Employee Directors |
||||||||||||
Paul LaViolette |
50,000 | 18.39 | 381,325 | |||||||||
Michael Koby |
50,000 | 18.39 | 381,325 | |||||||||
Thomas M. Patton |
97,500 | 13.98 | 1,174,050 | |||||||||
Patrick Beyer |
20,000 | 19.09 | 138,600 |
(1) | Represents the in-the-money |
Name |
Cash ($) (1) |
Equity ($) (2) |
Perquisites/ benefits ($) (3) |
Total ($) |
||||||||||||
Stavros G. Vizirgianakis |
1,145,400 | 7,543,569 | 33,823 | 8,722,792 | ||||||||||||
Joseph P. Dwyer |
556,800 | 1,089,332 | 22,067 | 1,668,200 | ||||||||||||
Robert S. Ludecker |
404,430 | 527,657 | — | 932,087 |
(1) | Amounts reflect the base salary severance payment due to such named executive officer upon a qualifying termination of employment pursuant to his existing employment arrangement (as described above under “Misonix Compensation Arrangements”) and the target bonus amount payable under Misonix’s fiscal year 2022 short-term incentive plan upon a change in control of Misonix. |
(2) | Amounts reflect the potential value of full acceleration of: (a) for Mr. Vizirgianakis, all unvested options and restricted stock (which assumes that any stock price conditions and revenue targets, where applicable, have been met); and (b) for Mr. Dwyer and Mr. Ludecker, all unvested options, in each case upon a change in control of the Misonix (as defined in the applicable award agreements and equity plans) regardless of whether the executive’s employment is terminated. |
(3) | Amounts include benefits continuation payments upon a qualifying termination of employment pursuant to his existing employment arrangement (as described above under “Misonix Compensation Arrangements”). |
• | banks or other financial institutions; |
• | pass-through entities or investors in pass-through entities; |
• | real estate investment trusts; |
• | insurance companies; |
• | tax-exempt organizations; |
• | brokers or dealers in securities; |
• | traders in securities that elect to use a mark-to-market |
• | regulated investment companies; |
• | pension funds, individual retirement and other tax-deferred accounts; |
• | persons that hold Misonix common stock or Bioventus class A common stock, as applicable, as part of a straddle, hedge, short sale, constructive sale or conversion transaction or other integrated or risk reduction transaction; |
• | persons who purchased or sell their shares of Misonix common stock or Bioventus class A common stock, as applicable, as part of a wash sale; |
• | persons that own (directly, indirectly, or by attribution), or at any time during the five year period ending on the closing date owned, 5% or more (by vote or value) of Misonix common stock or Bioventus class A common stock, as applicable; |
• | certain U.S. expatriates or U.S. holders that have a functional currency other than the U.S. dollar; |
• | persons required to accelerate the recognition of any item of gross income as a result of such income being recognized on an “applicable financial statement;” |
• | persons who exercise dissenters’ rights; |
• | “controlled foreign corporations,” “passive foreign investment companies” and “personal holding companies”; and |
• | holders who acquired their shares of Misonix common stock or Bioventus class A common stock, as applicable, through the exercise of an employee stock option or otherwise as compensation or through a tax-qualified retirement plan. |
• | an individual who is a citizen or resident of the United States; |
• | a corporation, or any other entity treated as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States or any state thereof or the District of Columbia; |
• | a trust (1) that is subject to the primary supervision of a court within the United States and all the substantial decisions of which are controlled by one or more United States persons or (2) that has a valid election in effect under applicable Treasury Regulations to be treated as a United States person; or |
• | an estate that is subject to U.S. federal income tax on its income regardless of its source. |
• | the gain is effectively connected with the conduct of a trade or business by such non-U.S. holder within the United States (or, under certain income tax treaties, is attributable to a U.S. permanent establishment or fixed base maintained by the non-U.S. holder), in which case the non-U.S. holder will generally be subject to U.S. federal income tax on that gain on a net income basis in the same manner as if the non-U.S. holder were a U.S. person as defined under the Code, and a corporate non-U.S. holder may be subject to the branch profits tax at a 30% rate (or lower rate as may be specified by an applicable income tax treaty); or |
• | such non-U.S. holder is an individual who is present in the United States for 183 days or more in the taxable year in which the first merger occurs and certain other conditions are met, in which case the non-U.S. holder will be subject to a 30% tax on the amount by which its capital gains allocable to U.S. sources, including gain from the taxable sale or exchange of Misonix common stock pursuant to the first merger, exceeds any capital losses allocable to U.S. sources, except as otherwise required by an applicable income tax treaty. |
• | such gain is effectively connected with the conduct of a trade or business by such non-U.S. holder within the United States (or, under certain income tax treaties, is attributable to a U.S. permanent establishment or fixed base maintained by the non-U.S. holder), in which case the non-U.S. holder will generally be subject to U.S. federal income tax on that gain on a net income basis in the same manner as if the non-U.S. holder were a U.S. person as defined under the Code, and a corporate non-U.S. holder may be subject to the branch profits tax at a 30% rate (or lower rate as may be specified by an applicable income tax treaty), or |
• | the non-U.S. holder is an individual who is present in the United States for 183 days or more in the taxable year in which the first merger occurs and certain other conditions are met, in which case the non-U.S. holder will be subject to a 30% tax on the amount by which its capital gains allocable to U.S. sources, including gain from the taxable sale or exchange of a fractional share of Bioventus class A common stock pursuant to the first merger, exceed any capital losses allocable to U.S. sources, except as otherwise required by an applicable income tax treaty. |
Bioventus |
Misonix | |
Authorized and Outstanding Capital Stock | ||
Bioventus is authorized to issue 310,000,000 shares of stock, consisting of 250,000,000 shares of Bioventus class A common stock, par value $0.001 per share, 50,000,000 shares of Bioventus class B common stock, par value $0.001 per share, and 10,000,000 shares of preferred stock, par value $0.001 per share. As of the close of business on the Bioventus record date, there were [●] shares of Bioventus common stock and no shares of serial preferred stock issued and outstanding. |
Misonix is authorized to issue is 47,000,000 shares, consisting of 45,000,000 shares of common stock, par value of $0.0001 per share, and 2,000,000 shares of preferred stock, par value of $0.0001 per share. As of the close of business on the Misonix record date, there were [●] shares of Misonix common stock and no shares of preferred stock issued and outstanding. | |
Rights of Preferred Stock | ||
Bioventus is authorized to issue preferred stock in one or more series, each of such series to have such terms as stated or expressed in the Bioventus charter and in the resolution or resolutions providing for the creation and issuance of such series adopted by the Bioventus board. Subject to certain limitations, the Bioventus board may issue the preferred stock in one or more series, and in connection with the creation of any such series, by adopting a resolution or resolutions providing for the issuance of the shares thereof and by filing a certificate of designation relating thereto in accordance with the DGCL to determine and fix the number of shares of such series and such voting powers, full or limited, or no voting powers, and such designations, preferences and relative participating, optional or other special rights, and qualifications, limitations or restrictions thereof, including without limitation thereof, dividend rights, |
The Misonix board is authorized, subject to limitations prescribed by law and the provisions of the Misonix charter, to provide for the creation and issuance from time to time in one or more series of any number of shares of preferred stock and, by filing a certificate pursuant to the DGCL, to establish the number of shares to be included in each such series, and to fix the designation, relative rights, preferences, qualifications and limitations of the shares of each such series. |
Bioventus |
Misonix | |
Rights of Preferred Stock | ||
conversion rights, redemption privileges and liquidation preferences, and to increase or decrease (but not below the number of shares of such series then outstanding) the number of shares of any series as shall be stated and expressed in such resolutions, all to the fullest extent now or hereafter permitted by the DGCL. | | |
Voting Rights | ||
Except as may be otherwise provided in the Bioventus charter, and subject to the rights, powers and preferences of the holders any series of preferred stock, each stockholder of Bioventus common stock shall be entitled to one (1) vote for each share of common stock held of record by such stockholder as of the record date for determining stockholders entitled to vote on such matter. Except as otherwise provided by the Bioventus charter, at all duly called or convened meetings of stockholders at which a quorum is present, for the election of directors, a plurality of the votes cast shall be sufficient to elect a director. Except as otherwise provided by the Bioventus charter, the Bioventus bylaws, the rules or regulations of any stock exchange applicable to Bioventus, or applicable law or pursuant to any regulation applicable to Bioventus or its securities, each other matter presented to the stockholders at a duly called or convened meeting at which a quorum is present shall be decided by the affirmative vote of the holders of a majority in voting power of the votes cast (excluding abstentions and broker non-votes) on such matter. |
Subject to the rights of the holders of any series of preferred stock, each stockholder of Misonix common stock is entitled to one (1) vote on each matter submitted to a vote at a meeting of stockholders for each share of common stock held of record by such holder as of the record date for the meeting. Except as otherwise provided by the Misonix charter, at all duly called or convened meetings of stockholders at which a quorum is present, for the election of directors, a plurality of the votes cast shall be sufficient to elect a director. Except where a larger vote is required by the Misonix bylaws, the Misonix charter, a certificate of designation relating to Misonix preferred stock, or by law each other matter at any meeting of stockholders in which a quorum is present shall be decided by the affirmative vote of a majority of the votes properly cast on the matter (excluding abstentions and broker non-votes). | |
Distributions and Dividends | ||
The Bioventus board, subject to any restrictions under applicable law (including the DGCL) and the Bioventuscharter, may declare and pay dividends upon the shares of its capital stock. Dividends may be paid in cash, in property or in shares of Bioventus capital stock. The Bioventus board may set apart out of any of the funds of Bioventus available for dividends a reserve or reserves for any proper purpose and may abolish any such reserve. Such purposes shall include but not be limited to equalizing dividends, repairing or maintaining any property of Bioventus, and meeting contingencies. |
The DGCL provides that, the directors of a corporation may, subject to any restrictions contained in its certificate of incorporation, declare and pay dividends upon the shares of its capital stock either (i) out of surplus or (ii) in the case there is no surplus, out of its net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year. Subject to the rights of any other class or series of stock, the holders of shares of Misonix common stock shall be entitled to receive, if and when declared by the Misonix board, out of the assets of the Misonix legally available therefor such dividends as may be declared from time to time by the Misonix board. |
Bioventus |
Misonix | |
Quorum | ||
The Bioventus bylaws provide that, unless otherwise provided by law, or the Bioventus charter or bylaws, the holders of a majority in voting power of the stock issued and outstanding and entitled to vote at the meeting, present in person, or by remote communication, if applicable, or represented by proxy, shall constitute a quorum for the transaction of business at all meetings of the stockholders. | The Misonix bylaws provide that, unless otherwise provided by law or in a certificate of designation relating to Misonix preferred stock, the holders of a majority in voting power of the shares of stock issued and outstanding and entitled to vote at the meeting, present in person or represented by proxy, will constitute a quorum at a meeting of stockholders for the transaction of business thereat. | |
Record Date | ||
The Bioventus board may fix a record date for purposes of, among other things, determining the rights of stockholders to notice of or to vote at any stockholder meeting and determining the identity of stockholders entitled to receive payment of any dividend or other distribution. In the case of determining stockholders entitled to vote at a stockholder meeting, the record date cannot be more than 60 nor less than ten days before the date of the meeting. In order that Bioventus may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment or any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of capital stock, for the purposes of any other lawful action (other than stockholder action by written consent), the record date cannot be more than 60 days before such action. The record date for determining stockholders entitled to express written consent to corporate action without a meeting may also be fixed by the Bioventus board, which record date shall not precede, or be more than ten days after, the resolution adopted by the Bioventus board fixing the record date. |
The Misonix board may fix a record date for purposes of determining the rights of stockholders to notice of or to vote at any stockholder meeting and determining the identity of stockholders entitled to receive payment of any dividend or other distribution. In the case of determining stockholders entitled to vote at a stockholder meeting, the record date will not precede the date upon which the Board resolution fixing the same is adopted and will not be more than 60 nor less than 10 calendar days before the date of such meeting. In the case of any other lawful action, the record date cannot be more than 60 days before such action. | |
Number of Directors | ||
The Bioventus bylaws and Bioventus Charter provide that the total authorized number of directors shall be determined from time to time by resolution of the majority of the Bioventus board. No decrease in the number of directors shall shorten the term of any incumbent director. There are currently nine Bioventus directors. | The Misonix charter provides that the total authorized number of directors will be fixed exclusively by resolution of a majority of the entire Misonix board. There are currently five Misonix directors. |
Bioventus |
Misonix | |
Election of Directors | ||
Subject to the certain rights of the holders of preferred stock (if issued) to elect directors, the directors of Bioventus shall be divided into three classes, designated as Class I, Class II and Class III. The directors in these three classes serve for rotational terms. Pursuant to the Bioventus bylaws, at all duly called or convened meetings of stockholders at which a quorum is present, for the election of directors, a plurality of the votes cast shall be sufficient to elect a director. The Bioventus charter expressly provides that the election of directors need not be by written ballot unless the Bioventus bylaws so provide. Bioventus has agreed to offer at least two members of the Misonix board to the Bioventus board as of the effective time, with such directors to hold office until the earliest to occur of the appointment or election and qualification of his or her respective successor or his or her death, resignation, disqualification or proper removal. See “Summary—Governance of the Combined Company.” |
The directors of Misonix are not divided into classes. Pursuant to the Misonix bylaws, at all duly called or convened meetings of stockholders at which a quorum is present, for the election of directors, a plurality of the votes cast shall be sufficient to elect a director. | |
Cumulative Voting | ||
Bioventus stockholders do not have cumulative voting rights. | Misonix stockholders do not have cumulative voting rights. | |
Removal of Directors | ||
Subject to the special rights of the holders of one or more outstanding series of preferred stock (if issued) to elect directors and subject to the Bioventus stockholders agreement, the Bioventus board or any individual director may be removed from office at any time, but only for cause and only by the affirmative vote of the holders of at least two-thirds of the voting power of all of the then outstanding shares of voting stock of Bioventus entitled to vote at an election of directors. |
Under the DGCL, directors may be removed, with cause, by the holders of a majority of the shares of capital stock of Misonix entitled to vote generally in the election of directors, voting together as a single class. | |
Director Nominations by Stockholders | ||
The Bioventus bylaws provide that stockholders seeking to nominate persons for election to the Bioventus board must (i) be present at the annual or special meeting, (ii) be the record owner of shares of Bioventus both at the time of giving the required notice and at the time of the meeting (iii) be entitled to vote at the meeting and (iv) comply with the notice provisions set forth in the | The Misonix bylaws provide that, subject to the rights, if any, of any series of preferred stock of Misonix to nominate or elect directors under circumstances specified in a certificate of designation, director nominations may only be made at an annual meeting of stockholders and only (i) by or at the direction of the Misonix board or (ii) by a |
Bioventus |
Misonix | |
Director Nominations by Stockholders | ||
Bioventus bylaws. These notice requirements generally require that, among other things, the stockholder deliver a notice of any such nomination for election of a director at the annual meeting, to the offices of Bioventus not less than 90 days nor more than 120 days prior to the anniversary of the date of the preceding year’s annual meeting (which date of the preceding year’s annual meeting, for the first annual meeting, shall be deemed to be May 14, 2021). For the notice to be timely for the nomination of a director at a special meeting, the stockholder must deliver notice to the Bioventus offices no earlier than 120 days nor any later than 90 days prior to such special meeting. Separately, a stockholder (or a group of up to 20 stockholders) who complies with or meets, as applicable, the procedural, informational and stockholder eligibility requirements set forth in the proxy access provision of the Bioventus bylaws may also nominate a candidate to the Bioventus board at a meeting of stockholders pursuant to such provisions, in which case any such nominees nominated pursuant to such provisions shall be included by Bioventus in its proxy statement or form of proxy and ballot. To nominate a candidate pursuant to such proxy access bylaw, the stockholder must meet certain requirements and, among other things, submit certain information to Bioventus’ Secretary, as prescribed by the Bioventus bylaws, no less than 120 days prior to the first anniversary of the date of Bioventus’ proxy materials released to stockholders in connection with the preceding year’s annual meeting. |
stockholder who (A) has properly complied with the provisions of the Misonix bylaws, (B) was a stockholder of record at the time of giving the required notice of such nomination and is a stockholder of record at the time of the annual meeting, (C) is entitled to vote at the annual meeting and (D) has nominated a number of nomineeds that does not exceed the number of directors that will be elected at the annual meeting. A stockholder’s notice of a director nomination must contain the following information: (i) all of the information regarding the nominating person that is required by Section 10 of the Misonix bylaws for proposing persons; and (ii) the following information regarding the nominee: (A) all of the information regarding the nominee that is required by Section 10 of the Misonix bylaws for proposing persons; (B) all information that would be required to be disclosed in a proxy statement or other filing pursuant to Section 14(a) of the Exchange Act to be made in connection with a general solicitation of proxies for an election of directors; (C) a description of all compensation and other material monetary agreements during the past three years, or any material relationships, between the nominating person and his or her affiliates and associates, on the one hand, and the proposed nominee and his or her affiliates or associates, on the other hand; (D) a completed questionnaire with respect to the identity, background and qualifications of the proposed nominee; and (E) a representation that the nominee (1) is qualified and intends to serve the entire term if elected; (2) is not and will not become party to any arrangement that has not been disclosed to the Misonix as to how the nominee will vote or act on any issues or questions or any such arrangement that could limit the nominee’s ability to comply with the nominee’s fiduciary duties; (3) is not and will not become a party to any agreement that has not been disclosed with any person other than the Misonix with respect to any form of compensation in connection with service as a director; and (4) if elected, will be in compliance and will comply with all policies of Misonix. A stockholder is not entitled to have its nominees included in Misonix’s proxy statement solely as a result of such stockholder’s compliance with the foregoing provisions. If the nominating stockholder does not appear at the annual meeting to present its nominee in person, the nomination will be disregarded. |
Bioventus |
Misonix | |
Stockholder Proposals | ||
Business may be properly brought before an annual meeting by any stockholder present in person who (A)(1) is a stockholder of record both at the time of giving notice and at the time of the meeting, (2) is entitled to vote at the meeting, and (3) complies with the notice requirements set forth in the Bioventus bylaws; or (B) properly made such proposal in accordance with rule 14a-8 under the Exchange Act, as amended, and the rules and regulations thereunder.To be timely, a stockholder’s notice must generally be delivered to Bioventus’ Secretary no less than 90 days and no more than 120 days prior to the anniversary of the date of immediately precedent annual meeting of stockholders. |
Business may be properly brought before an annual meeting by any Misonix stockholder so long as the individual or entity is a Misonix stockholder of record both at the time the written notice provided for in the Misonix bylaws is delivered and at the time of the meeting, provided such stockholder has also complied with all applicable requirements of Sections 10 and 12 of the Misonix bylaws. The Misonix stockholder must also be entitled to vote at the meeting and comply with the notice requirements set forth in the Misonix bylaws. | |
Stockholder Action by Written Consent | ||
Any action required or permitted to be taken by the Bioventus stockholders at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, are signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares of stock of Bioventus entitled to vote thereon were present and voted and delivered to Bioventus in accordance with the DGCL; provided, however, that no action by stockholders may be taken by written consent in lieu of a meeting of stockholders unless such written consent and the taking of the action specified therein have been previously approved by the affirmative vote of the majority of the Bioventus board. | The Misonix charter provides that any action required or permitted to be taken by the Misonix stockholders may be taken either at a duly called annual or special meeting of stockholders or without a meeting by written consent. | |
Special Stockholder Meetings | ||
Subject to the special rights of the holders of one or more series of preferred stock (if issued), special meetings of the stockholders may be called only by the chairperson of the Bioventus board, the Chief Executive Officer, the President, the Secretary or a majority of the total number of authorized directors. The only matters to be brought before a special meeting are those specified in the meeting notice. Stockholders are not permitted to propose business (other than the election of directors) to be brought before a special meeting of stockholders. | Special meetings of Misonix stockholders may be called only by (i) a majority of the total number of directors that Misonix would have if there were no vacancies on the Misonix board or (ii) stockholders holding 50% of the voting power of the shares of Misonix stock generally entitled to vote generally in the election of directors. |
Bioventus |
Misonix | |
Notice of Stockholder Meetings | ||
Unless otherwise provided, the notice of any meeting of stockholders shall be sent or otherwise given in accordance with the notice provisions of Bioventus’s bylaws not less than ten nor more than 60 days before the date of the meeting to each stockholder entitled to vote at such meeting. The notice shall specify the place, if any, date and time of the meeting, the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, the record date for determining the stockholders entitled to vote at the meeting (if such date is different from the record date for stockholders entitled to notice of the meeting), and, in the case of a special meeting, the purpose or purposes for which the meeting is called. | Unless otherwise provided, the notice of any meeting of stockholders shall be sent or otherwise given in accordance with the notice provisions of Misonix’s bylaws not less than ten nor more than 60 days before the date of the meeting to each stockholder entitled to vote at such meeting. The notice shall specify the place, if any, date and time of the meeting, the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called. | |
Adjournment of Stockholder Meetings | ||
No notice need be given of any adjourned meeting if the place, date and time of the meeting, and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting, are announced at the meeting at which the adjournment is taken; provided that notice must be given to any stockholder entitled to vote at the adjourned meeting if the adjournment is longer than 30 days or if a new record date is fixed for the adjourned meeting. At any adjourned meeting, Bioventus may transact any business which might have been transacted at the original meeting. |
No notice need be given of any adjourned meeting if the place, date and time of the meeting, and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting, are announced at the meeting at which the adjournment is taken; provided that notice must be given to any stockholder entitled to vote at the adjourned meeting if the adjournment is longer than 30 days or if a new record date is fixed for the adjourned meeting. | |
Limitation of Personal Liability of Directors | ||
The Bioventus charter provides that no Bioventus director will be personally liable to Bioventus or its stockholders for monetary damages for breach of his or her fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL as the same exists or hereafter may be amended. | The Misonix charter provides that, to the full extent permitted by the DGCL and other applicable law, no Misonix director shall be personally liable to Misonix or any of its stockholders for or with respect to any breach of a fiduciary duty or other act or omission as a director of Misonix. | |
Indemnification of Directors and Officers | ||
Bioventus shall indemnify and hold harmless, to the fullest extent permitted by the DGCL, any current or former director or officer who was or is made or is threatened to be made a party or is otherwise involved in | Misonix shall indemnify and hold harmless, to the fullest extent permitted by the DGCL, any current or former director or officer who was or is made or is threatened to be made a party to or is otherwise |
Bioventus |
Misonix | |
Indemnification of Directors and Officers | ||
any action, suit or proceeding, whether civil, criminal, administrative or investigative by reason of the fact that the person was a director or officer of Bioventus or, while serving as a director or officer of Bioventus, is or was serving at the request of Bioventus as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or non-profit entity, against all liability and loss suffered and expenses (including attorneys’ fees, judgments, fines ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred by such person in connection with any such proceeding. |
subject to or involved in any claim, demand, action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was a director or an officer of Misonix or is or was serving at the request of Misonix as a director or officer, of another company or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan, whether the basis of such proceeding is alleged action in an official capacity as a director or officer or in any other capacity while serving as a director, officer, employee or agent, against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered. | |
Rights Upon Liquidation | ||
Pursuant to the Bioventus charter, after payment of the debts and other liabilities of Bioventus, and the distribution of all preferential amounts to be distributed to stockholders in the event of liquidation of Bioventus, holders of outstanding Bioventus class A common stock are entitled to receive all of Bioventus’ remaining assets available for distribution ratably in proportion to the number of shares held by each stockholder. | Pursuant to the Misonix charter, the rights of any series of preferred stock of Misonix upon the voluntary or involuntary dissolution of, or upon any distribution of the assets of, Misonix, shall be determined by the Misonix board upon authorizing such shares. | |
Stockholder Rights Plan | ||
The DGCL does not include a statutory provision expressly validating stockholder rights plans. However, such plans have generally been upheld by the decisions of courts applying Delaware law. Bioventus currently has a stockholder rights plan in place. | The DGCL does not include a statutory provision expressly validating stockholder rights plans. However, such plans have generally been upheld by the decisions of courts applying Delaware law. Misonix does not currently has a stockholder rights plan in place. | |
Certain Business Combinations | ||
Section 203 of the DGCL generally prohibits a Delaware corporation from engaging in a business combination with an “interested stockholder” that acquires more than 15% but less than 85% of the corporation’s outstanding voting stock for three years following the time that person becomes an “interested stockholder” (generally defined as a holder who (i) together with its affiliates and associates, owns or (ii) is an affiliate or associate of the corporation and, | Section 203 of the DGCL generally prohibits a Delaware corporation from engaging in a business combination with an “interested stockholder” that acquires more than 15% but less than 85% of the corporation’s outstanding voting stock for three years following the time that person becomes an “interested stockholder” (generally defined as a holder who (i) together with its affiliates and associates, owns or (ii) is an affiliate or associate of |
Bioventus |
Misonix | |
Certain Business Combinations | ||
together with that person’s affiliates and associates, has owned at any time within the previous three years, at least 15% of the corporation’s outstanding shares), unless prior to the date the person becomes an interested stockholder, the corporation’s board of directors approves either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder or the business combination is approved by the corporation’s board of directors and by the affirmative vote of at least two-thirds of the corporation’s outstanding voting stock that is not owned by the interested stockholder at a meeting of stockholders (and not by written consent) or other specified exceptions are met. The DGCL allows a corporation’s certificate of incorporation to contain a provision expressly electing not to be governed by Section 203, but the Bioventus charter has not opted out of Section 203.Although the DGCL permits a Delaware corporation’s certificate of incorporation to provide for a greater vote for a merger, consolidation or sale of substantially all the assets of a corporation than the vote described above, the Bioventus charter does not require a greater vote. |
the corporation and, together with that person’s affiliates and associates, has owned at any time within the previous three years, at least 15% of the corporation’s outstanding shares), unless prior to the date the person becomes an interested stockholder, the corporation’s board of directors approves either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder or the business combination is approved by the corporation’s board of directors and by the affirmative vote of at least two-thirds of the corporation’s outstanding voting stock that is not owned by the interested stockholder at a meeting of stockholders (and not by written consent) or other specified exceptions are met. The DGCL allows a corporation’s certificate of incorporation to contain a provision expressly electing not to be governed by Section 203, but the Misonix charter has not opted out of Section 203.Although the DGCL permits a Delaware corporation’s certificate of incorporation to provide for a greater vote for a merger, consolidation or sale of substantially all the assets of a corporation than the vote described above, the Misonix charter does not require a greater vote. | |
Exclusive Forum | ||
The Bioventus charter provides that, unless Bioventus consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware is, to the fullest extent permitted by law, the sole and exclusive forum for the following types of actions or proceedings: (i) any derivative action, suit, or proceeding brought on behalf of Bioventus; (ii) any action, suit, or proceeding asserting a claim of breach of a fiduciary duty owed by any current or former Bioventus director, officer, other employee or stockholder to Bioventus or its stockholders; (iii) any action, suit, or proceeding asserting a claim arising pursuant to any provision of the DGCL, the Bioventus charter or the Bioventus bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware; or (iv) any action asserting a claim governed by the internal affairs doctrine. The Bioventus bylaws also provide that, unless Bioventus consents in writing to the selection of an alternate | The Misonix charter provide that, unless Misonix consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of Misonix; (b) any action or proceeding asserting a claim of breach of a fiduciary duty owed by any current or former director, officer or other employee of Misonix to Misonix or the Misonix’s stockholders; (c) any action or proceeding asserting a claim against Misonix or any current or former director or officer or other employee of Misonix arising out of or pursuant to any provision of the DGCL, the Misonix charter or Misonix bylaws (including any right, obligation, or remedy thereunder); (d) any action or proceeding to interpret, apply, enforce or determine the validity of the Misonix charter or Misonix bylaws (including any right, obligation, or remedy thereunder); (e) any |
Bioventus |
Misonix | |
Exclusive Forum | ||
forum, the U.S. federal district courts are the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. Nothing in the Bioventus charter or the Bioventus bylaws would preclude stockholders that assert claims under the Exchange Act from bringing such claims in federal court to the extent the Exchange Act confers exclusive federal jurisdiction over such claims, subject to applicable law. | action or proceeding as to which the DGCL confers jurisdiction to the Court of Chancery of the State of Delaware; and (f) any action asserting a claim against Misonix or any director or officer or other employee of Misonix governed by the internal affairs doctrine, in all cases to the fullest extent permitted by law and subject to the court’s having personal jurisdiction over the indispensable parties named as defendants. Nothing in the Misonix charter would preclude stockholders that assert claims under the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. |
• | you must not vote in favor of the Misonix merger proposal. Because a proxy that is signed and submitted but does not otherwise contain voting instructions will, unless revoked, be voted in favor of Misonix merger proposal, if you vote by proxy and wish to exercise your appraisal rights, you must provide instructions in any such proxy to vote against the Misonix merger proposal or abstain from voting your shares; |
• | you must deliver to Misonix a written demand for appraisal of your shares before the vote on the Misonix merger proposal at the Misonix special meeting. This written demand for appraisal must be in addition to any proxy or vote abstaining from or voting against the Misonix merger agreement proposal. All demands for appraisal must be made by, or on behalf of, the record holder of shares, fully and correctly, as the record holder’s name appears, with respect to shares evidenced by certificates, on your stock certificate, or, with respect to shares held in “street name” through a bank, brokerage firm or other nominee, on the stock ledger. Your written demand must reasonably inform Misonix of your identity and your intention to demand appraisal of your shares of common stock; |
• | you must hold the shares on the date of making the demand and must continuously hold such shares from the date of making the demand through the effective time. You will lose your appraisal rights if you transfer the shares for which you are seeking appraisal before the effective time; and |
• | you or the Surviving Company must file a petition in the Delaware Court of Chancery requesting a determination of the fair value of the shares of Misonix common stock within 120 days after the effective time. The Surviving Company is under no obligation to file any such petition in the Delaware Court of Chancery and has no intention of doing so. Accordingly, it is the obligation of the Misonix stockholders to initiate all necessary action to perfect their appraisal rights in respect of shares of Misonix common stock within the time prescribed in Section 262 of the DGCL. |
• | each person, or group of affiliated persons, known by Bioventus to beneficially own more than 5% of Bioventus class A common stock or Bioventus class B common stock; |
• | each named executive officer; |
• | each of Bioventus’ directors; and |
• | all executive officers and directors as a group. |
Shares of Class A Common Stock Beneficially Owned |
Shares of Class B Common Stock Beneficially Owned |
Combined Voting Power (1) |
||||||||||||||||||
Name of Beneficial Owner |
Number |
% |
Number |
% |
% |
|||||||||||||||
5% Stockholders |
||||||||||||||||||||
EW Healthcare Partners (2) |
13,021,324 | 31.7 | % | — | * | 22.9 | % | |||||||||||||
Smith & Nephew (3) |
6,229,991 | 15.2 | % | 15,786,737 | 100 | % | 38.7 | % | ||||||||||||
Spindletop Healthcare Capital L.P. (4) |
3,906,395 | 9.5 | % | — | * | 6.9 | % | |||||||||||||
Ampersand Capital (5) |
3,255,332 | 7.9 | % | — | * | 5.7 | % | |||||||||||||
Pantheon Global Co-Investment Opportunities Fund L.P.(6) |
2,821,283 | 6.9 | % | — | * | 5.0 | % | |||||||||||||
Alta Partners VIII, L.P. (7) |
2,604,264 | 6.3 | % | — | * | 4.6 | % | |||||||||||||
Integrated Core Strategies (US) LLC (8) |
2,432,581 | 5.9 | % | — | * | 4.3 | % |
Shares of Class A Common Stock Beneficially Owned |
Shares of Class B Common Stock Beneficially Owned |
Combined Voting Power (1) |
||||||||||||||||||
Name of Beneficial Owner |
Number |
% |
Number |
% |
% |
|||||||||||||||
Name Executive Officers and Directors |
||||||||||||||||||||
Kenneth M. Reali |
9,375 | * | — | * | * | |||||||||||||||
Gregory O. Anglum |
6,000 | * | — | * | * | |||||||||||||||
John E. Nosenzo |
500 | * | — | * | * | |||||||||||||||
Anthony D’Adamio |
1,000 | * | — | * | * | |||||||||||||||
Alessandra Pavesio |
— | * | — | * | * | |||||||||||||||
William A. Hawkins |
— | * | — | * | * | |||||||||||||||
Philip G. Cowdy |
— | * | — | * | * | |||||||||||||||
Guido J. Neels |
— | * | — | * | * | |||||||||||||||
Guy P. Nohra |
— | * | — | * | * | |||||||||||||||
David J. Parker |
— | * | — | * | * | |||||||||||||||
Martin P. Sutter |
— | * | — | * | * | |||||||||||||||
Susan M. Stalnecker |
— | * | — | * | * | |||||||||||||||
Mary Kay Ladone |
— | * | — | * | * | |||||||||||||||
All directors and executive officers as a group (13 persons) |
16,875 | * | — | * | * |
* | Represents beneficial ownership of less than 1%. |
(1) |
Represents the voting power of each owner based on the voting power held through both the owner’s Bioventus class A common stock and Bioventus class B common stock. Represents percentage of voting power of the Bioventus class A common stock and Bioventus class B common stock voting together as a single class. |
(2) |
Represents 12,096,702 shares held by EW Healthcare Partners Acquisition Fund, L.P., which Bioventus refers to as the “Essex Stockholder,” and 924,622 shares held by White Pine Medical, LLC, a subsidiary of the Essex Stockholder, which Bioventus refers to as “White Pine.” EW Healthcare Partners Acquisition Fund GP, L.P., a Delaware limited partnership, is the general partner of the Essex Stockholder and is referred to as the “Partnership,” and EW Healthcare Partners Acquisition Fund UGP, LLC, a Delaware limited liability company, is the general partner of the Partnership and is referred to as the “General Partner.” Martin P. Sutter, Petri Vainio, Ronald W. Eastman, and Scott Barry are the managers of the General Partner, and each is referred to as a “Manager” and collectively as the “Managers.” The Partnership is deemed to have sole voting and dispositive power with respect to the shares held by the Essex Stockholder and White Pine. The Managers are deemed to have shared voting and dispositive power with respect to the shares held by the Essex Stockholder and White Pine by unanimous consent and through the Partnership. Each Manager disclaims beneficial ownership of such shares except to the extent of his pecuniary interest therein. The address of the Essex Stockholder and White Pine is 21 Waterway Avenue, Suite 225, The Woodlands, Texas 77380. |
(3) |
Represents the shares of Bioventus class A common stock held by Smith & Nephew USD Limited, and the shares of Bioventus class B common stock held by Smith & Nephew, Inc., a wholly owned indirect U.S. subsidiary of Smith & Nephew plc. The address of Smith & Nephew (Europe) B.V. is Bloemlaan 2, 2132 NP Hoofddorp, Netherlands. The address of Smith & Nephew, Inc. is 7135 Goodlett Farms, Cordova, Tennessee 38106. |
(4) |
Represents shares held by Spindletop Healthcare Capital L.P. Evan Melrose, MD is the Manager of the General Partner of the General Partner of Spindletop Healthcare Capital L.P. and may be deemed to have shared voting and dispositive power with respect to the shares held by Spindletop Healthcare Capital L.P. The address of Spindletop Healthcare Capital L.P. is 3571 Far West Blvd., PMB #108, Austin, Texas 78731. |
(5) |
Represents shares held by AMP-CF Holdings, LLC, which Bioventus refers to as the “Ampersand Capital Stockholder.” Herbert H. Hooper, the Managing Member of the General Partner of the General Partner of each of the members and managers of the Ampersand Capital Stockholder, may be deemed to have voting and dispositive power with respect to shares held by the Ampersand Capital Stockholder. The address of the Ampersand Capital Stockholder is in care of Ampersand Capital Partners, 55 William Street, Suite 240, Wellesley, Massachusetts 02481. |
(6) |
Represents shares held by Pantheon Global Co-Investment Opportunities Fund L.P. David Braman, Susan Long McAndrews and Lily Wong are directors of Pantheon Global Co-Investment Opportunities GP Limited, the general partner of Pantheon Global Co-Investment Opportunities Fund, L.P. and make the investment and voting decisions with respect to shares held by of Pantheon Global Co-Investment Opportunities Fund, L.P. The address of Pantheon Global Co-Investment Opportunities Fund L.P. is 600 Montgomery Street, 23rd Floor, San Francisco, CA 94111. |
(7) |
Represents shares held by Alta Partners VIII, L.P. Alta Partners Management VIII, LLC is the general partner of Alta Partners VIII, L.P. Guy Nohra, Daniel Janney and Farah Champsi are managing directors of Alta Partners Management VIII, LLC and exercise shared voting and investment powers with respect to the shares owned by Alta Partners VIII, L.P. Each of the reporting persons disclaims beneficial ownership of such shares, except to the extent of their proportionate pecuniary interest therein, if any. The principal business address of Alta Partners VIII, L.P. is One Embarcadero Center, 37th Floor San Francisco, CA 94111. |
(8) |
Pursuant to the Schedule 13G filed with the SEC by Integrated Core Strategies (US), LLC (Integrated Core Strategies) et al, reporting ownership of these shares of Bioventus class A common stock as of March 16, 2021. As reported in said Schedule 13G, Integrated Core Strategies reports shared voting and dispositive power with respect to 2,033,399 shares of Bioventus class A common stock, ICS Opportunities II LLC (ICS Opportunities II) reports shared voting and dispositive power with respect to 75,287 shares of Bioventus class A common stock, ICS Opportunities, Ltd. (ICS Opportunities) reports shared voting and dispositive power with respect to 310,116 shares of Bioventus class A common stock, Integrated Assets, Ltd. (Integrated Assets) reports shared voting and dispositive power with respect to 13,779 shares of Bioventus class A common stock, Millennium International Management LP (Millennium International Management) reports shared voting and dispositive power with respect to 399,182 shares of Bioventus class A common stock, Millennium Management LLC (Millennium Management) reports shared voting and dispositive power with respect to 2,432,581 shares of Bioventus class A common stock, Millennium Group Management LLC (Millennium Group Management) reports shared voting and dispositive power with respect to 2,432,581 shares of Bioventus class A common stock, and Israel A. Englander reports shared voting and dispositive power with respect to 2,432,581 shares of Bioventus class A common stock. Millennium International Management is the investment manager to ICS Opportunities II, ICS Opportunities and Integrated Assets (collective, the ICS Entities) and is deemed to have beneficial ownership of their respective securities. Millennium Management is the general partner of the managing member of Integrated Core Strategies and the general partner of the 100% owner of the ICS Funds is deemed to have beneficial ownership of the securities owned by each of Integrated Core Strategies and the ICS Entities (collectively, the Integrated Entities). Millennium Group Management is the managing member of Millennium Management and general partner of Millennium International Management and is deemed to have beneficial ownership of the securities owned by the Integrated Entities. The managing member of Millennium Group Management is a trust of which Mr. Englander, a United States citizen, currently serves as the sole voting trustee, and therefor Mr. Englander is deemed to have beneficial ownership of securities owned by the Integrated Entities. The address of Mr. Englander and each of the foregoing entities is 399 Park Avenue, New York, New York 10022. |
• | each named executive officer of Misonix; |
• | each member of the Misonix board; |
• | the members of the Misonix board and Misonix current executive officers as a group; and |
• | each person known by Misonix to beneficially own more than 5% of the outstanding shares of Misonix common stock. |
Name and Address (1) |
Common Stock Beneficially Owned |
Percent Of Class |
||||||
Stavros G. Vizirgianakis |
1,783,641 | (2) |
10.02 | % | ||||
1315 Capital |
1,714,017 | 9.63 | % | |||||
SV Health Investors |
1,714,017 | 9.63 | % | |||||
Robert S. Ludecker |
263,828 | (3) |
1.46 | % | ||||
Joseph P. Dwyer |
159,531 | (4) |
* | |||||
Thomas M. Patton |
70,750 | (5) |
* | |||||
Michael Koby |
— | (6) |
* | |||||
Paul LaViolette |
— | (7) |
* | |||||
Patrick J. Beyer |
— | * | ||||||
|
|
|
|
|||||
All executive officers and Directors as a group (Eight people) |
5,705,784 | (8) |
31.62 | % |
* | Less than 1% |
(1) | Except as otherwise noted, the business address of each of the named individuals in this table is c/o Misonix, Inc., 1938 New Highway, Farmingdale, NY 11735. |
(2) | Includes 124,563 shares which Mr. Vizirgianakis has the right to acquire upon exercise of stock options which are exercisable within 60 days. |
(3) | Includes 252,328 shares which Mr. Ludecker has the right to acquire upon exercise of stock options which are exercisable within 60 days. |
(4) | Includes 154,831 shares which Mr. Dwyer has the right to acquire upon exercise of stock options which are exercisable within 60 days. |
(5) | Includes 63,750 shares which Mr. Patton has the right to acquire upon exercise of stock options which are exercisable within 60 days. |
(6) | Does not reflect any securities owned by 1315 Capital. Mr. Koby is a member of 1315 Capital Management, LLC. Under the Amended and Restated Limited Liability Company Agreement of 1315 Capital Management, LLC, Mr. Koby is deemed to hold securities for the benefit of 1315 Capital who is deemed to have voting and dispositive power with respect the securities. Mr. Koby disclaims beneficial ownership of the securities except to the extent of his pecuniary interest therein. |
(7) | Does not reflect any securities owned by SV Health Investors. Mr. LaViolette is a member of SV Health Investors. Under the Limited Liability Company Agreement of SV Health Investors, Mr. LaViolette is |
deemed to hold securities for the benefit of 1315 Capital who is deemed to have voting and dispositive power with respect the securities. Mr. LaViolette disclaims beneficial ownership of the securities except to the extent of his pecuniary interest therein. |
(8) | Includes 395,936 shares which such persons have the right to acquire upon exercise of stock options which are exercisable within 60 days. |
• | Misonix’s annual report on Form 10-K for the fiscal year ended June 30, 2021, filed with the SEC on September 2, 2021; |
• |
• | the description of Misonix common stock set forth in Misonix’s registration statement on Form 8-A (Registration No. 1-10986) filed with the SEC on January 22, 1992 under Section 12 of the Exchange Act and all amendments or reports filed by Misonix for the purpose of updating that description. |
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Audited Financial Statements: |
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GRANT THORNTON LLP |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | |
4140 ParkLake Ave., Suite 130 |
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Raleigh, NC 27612-3723 |
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D +1 919 881 2700 |
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F +1 919 881 2795 |
2020 |
2019 |
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Assets |
$ | $ | ||||||
Liabilities |
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Commitments and contingencies |
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Stockholders’ equity |
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Common stock, $ |
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Total liabilities and stockholders’ equity |
$ | $ | ||||||
GRANT THORNTON LLP |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | |
4140 ParkLake Ave., Suite 130 |
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Raleigh, NC 27612-3723 |
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D +1 919 881 2700 |
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F +1 919 881 2795 |
2020 |
2019 |
2018 |
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Net sales |
$ | $ | $ | |||||||||
Cost of sales (including depreciation and amortization of $ |
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Gross profit |
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Selling, general and administrative expense |
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Research and development expense |
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Change in fair value of contingent consideration |
— | — | ( |
) | ||||||||
Restructuring costs |
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Depreciation and amortization |
||||||||||||
Loss on impairment of intangible assets |
— | — | ||||||||||
Operating income |
||||||||||||
Interest expense |
||||||||||||
Other (income) loss |
( |
) | ( |
) | ||||||||
Other expense |
||||||||||||
Income from continuing operations before income taxes |
||||||||||||
Income tax expense |
||||||||||||
Net income from continuing operations |
||||||||||||
Loss from discontinued operations, net of tax |
— | |||||||||||
Net income (loss) |
( |
) | ||||||||||
Loss attributable to noncontrolling interest |
— | |||||||||||
Net income (loss) attributable to unit holders |
( |
) | ||||||||||
Other comprehensive income (loss), net of tax |
||||||||||||
Change in prior service cost and unrecognized (loss) gain for defined benefit plan adjustment |
( |
) | ( |
) | ||||||||
Change in foreign currency translation adjustments |
( |
) | ( |
) | ||||||||
Other comprehensive income (loss) |
( |
) | ( |
) | ||||||||
Comprehensive income (loss) |
$ | $ | $ | ( |
) | |||||||
Net income from continuing operations attributable to unit holders |
$ | $ | $ | |||||||||
Accumulated and unpaid preferred distributions |
( |
) | ( |
) | ( |
) | ||||||
Net income allocated to participating shareholders |
( |
) | ( |
) | — | |||||||
Net income (loss) from continuing operations attributable to common unit holders |
( |
) | ||||||||||
Loss from discontinued operations, net of tax |
— | |||||||||||
Net income (loss) attributable to common unit holders |
$ | $ | ( |
) | $ | ( |
) | |||||
Net income (loss) per unit attributable to common unit holders - basic and diluted |
||||||||||||
Net income (loss) from continuing operations |
$ | $ | $ | ( |
) | |||||||
Loss from discontinued operations, net of tax |
— | |||||||||||
Net income (loss) attributable to common unit holders |
$ | $ | ( |
) | $ | ( |
) | |||||
Weighted average units used in computing basic and diluted net income (loss) per common unit |
2020 |
2019 |
|||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | $ | ||||||
Accounts receivable, net |
||||||||
Inventory |
||||||||
Prepaid and other current assets |
||||||||
Total current assets |
||||||||
Property and equipment, net |
||||||||
Goodwill |
||||||||
Intangible assets, net |
||||||||
Operating lease assets |
||||||||
Investments and other assets |
||||||||
Total assets |
$ | $ | ||||||
Liabilities and Members’ Equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | $ | ||||||
Accrued liabilities |
||||||||
Accrued equity-based compensation |
||||||||
Current portion of long-term debt |
||||||||
Other current liabilities |
||||||||
Total current liabilities |
||||||||
Long-term debt, less current portion |
||||||||
Accrued equity-based compensation, less current portion |
||||||||
Deferred tax liability |
||||||||
Other long-term liabilities |
||||||||
Total liabilities |
||||||||
Commitments and contingencies (Note 12) |
||||||||
Members’ equity (preferred unit liquidation preference of $ |
||||||||
Accumulated other comprehensive income (loss) |
( |
) | ||||||
Accumulated deficit |
( |
) | ( |
) | ||||
Equity attributable to unit holders |
||||||||
Noncontrolling interest |
||||||||
Total members’ equity |
||||||||
Total liabilities and members’ equity |
$ | $ | ||||||
Members’ Equity |
Accumulated Other Comprehensive Income (Loss) |
Accumulated Deficit |
Noncontrolling Interest |
Total Members’ Equity |
||||||||||||||||
Balance at December 31, 2017 |
$ | $ | $ | ( |
) | $ | $ | |||||||||||||
Profits interest compensation |
— | — | — | |||||||||||||||||
Distribution to members |
— | — | ( |
) | — | ( |
) | |||||||||||||
Net loss |
— | — | ( |
) | — | ( |
) | |||||||||||||
Defined benefit plan adjustment |
— | — | — | |||||||||||||||||
Translation adjustment |
— | ( |
) | — | — | ( |
) | |||||||||||||
Balance at December 31, 2018 |
( |
) | ( |
) | — | |||||||||||||||
Profits interest forfeitures |
( |
) | — | — | — | ( |
) | |||||||||||||
Distribution to members |
— | — | ( |
) | — | ( |
) | |||||||||||||
Acquisition of noncontrolling interest |
— | — | — | |||||||||||||||||
Net income (loss) |
— | — | ( |
) | ||||||||||||||||
Defined benefit plan adjustment |
— | ( |
) | — | — | ( |
) | |||||||||||||
Translation adjustment |
— | ( |
) | — | — | ( |
) | |||||||||||||
Balance at December 31, 2019 |
( |
) | ( |
) | ||||||||||||||||
Profits interest forfeitures |
( |
) | — | — | — | ( |
) | |||||||||||||
Distribution to members |
— | — | ( |
) | — | ( |
) | |||||||||||||
Other equity compensation |
— | — | — | |||||||||||||||||
Debt conversion |
— | — | — | |||||||||||||||||
Net income (loss) |
— | — | ( |
) | ||||||||||||||||
Defined benefit plan adjustment |
— | ( |
) | — | — | ( |
) | |||||||||||||
Translation adjustment |
— | — | — | |||||||||||||||||
Balance at December 31, 2020 |
$ | $ | $ | ( |
) | $ | $ | |||||||||||||
2020 |
2019 |
2018 |
||||||||||
Operating activities: |
||||||||||||
Net income (loss) |
$ | $ | $ | ( |
) | |||||||
Net loss from discontinued operations |
— | |||||||||||
Net income from continuing operations |
||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities from continuing operations: |
||||||||||||
Depreciation and amortization |
||||||||||||
Loss on impairment of intangible assets |
— | — | ||||||||||
Change in fair value of contingent consideration |
— | — | ( |
) | ||||||||
Payment of contingent consideration in excess of amount established in purchase accounting |
— | ( |
) | ( |
) | |||||||
Provision for expected credit losses |
||||||||||||
Profits interest plan, liability-classified and other equity awards compensation |
||||||||||||
Change in fair value of Equity Participation Rights unit |
||||||||||||
Change in fair value of interest rate swap |
— | — | ||||||||||
Deferred income taxes |
( |
) | ( |
) | ( |
) | ||||||
Amortization of debt discount and capitalized loan fees, net |
||||||||||||
Loss on debt retirement and modification |
— | — | ||||||||||
Other, net |
( |
) | ||||||||||
Changes in operating assets and liabilities: |
||||||||||||
Accounts receivable |
( |
) | ( |
) | ( |
) | ||||||
Inventories |
( |
) | ( |
) | ||||||||
Accounts payable and accrued expenses |
||||||||||||
Other current assets and liabilities |
( |
) | ( |
) | ( |
) | ||||||
Net cash provided by operating activities from continuing operations |
||||||||||||
Net cash used in operating activities of discontinued operations |
( |
) | ( |
) | ( |
) | ||||||
Net cash provided by operating activities |
||||||||||||
Investing activities: |
||||||||||||
Investment and acquisition of distribution rights |
( |
) | ( |
) | ( |
) | ||||||
Acquisition of VIE |
— | — | ||||||||||
Purchase of property and equipment |
( |
) | ( |
) | ( |
) | ||||||
Net cash used in investing activities from continuing operations |
( |
) | ( |
) | ( |
) | ||||||
Net cash provided by (used in) investing activities from discontinued operations |
— | ( |
) | |||||||||
Net cash used in investing activities |
( |
) | ( |
) | ( |
) | ||||||
Financing activities: |
||||||||||||
Borrowing on revolver |
— | — | ||||||||||
Payment on revolver |
( |
) | — | — | ||||||||
Proceeds from the issuance of long-term debt, net of issuance costs |
— | — | ||||||||||
Payments on long-term debt |
( |
) | ( |
) | ( |
) | ||||||
Other financing activities |
( |
) | ( |
) | ||||||||
Distribution to members |
( |
) | ( |
) | ( |
) | ||||||
Net cash used in financing activities |
( |
) | ( |
) | ( |
) | ||||||
Effect of exchange rate changes on cash |
( |
) | ( |
) | ||||||||
Net change in cash and cash equivalents |
||||||||||||
Cash and cash equivalents at the beginning of the period |
||||||||||||
Cash and cash equivalents at the end of the period |
$ | $ | $ | |||||||||
Supplemental disclosure of cash flow information |
||||||||||||
Cash paid for income taxes |
$ | $ | $ | |||||||||
Cash paid for interest |
$ | $ | $ | |||||||||
Supplemental disclosure of noncash investing and financing activities |
||||||||||||
Accrued liabilities for distribution rights |
$ | $ | — | $ | ||||||||
Debt conversion |
$ | $ | — | $ | — | |||||||
Accounts payable for purchase of property and equipment |
$ | $ | $ | |||||||||
Accrued member distribution |
$ | $ | $ |
• | Level 1—Quoted prices in active markets for identical assets or liabilities; |
• | Level 2—Observable inputs other than quoted prices included within Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data; and |
• | Level 3—Unobservable inputs that are supported by little or no market data. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. |
Computer software and hardware |
||||
Leasehold improvements |
||||
Machinery and equipment |
||||
Furniture and fixtures |
Weighted Average Useful Life |
||||
Intellectual property |
||||
Distribution rights |
||||
Customer relationships |
||||
Developed technology |
2020 |
2019 |
2018 |
||||||||||
Supplier A |
% | % | % | |||||||||
Supplier B |
% | % | % | |||||||||
Supplier C |
% | % | % |
2020 |
2019 |
|||||||
Supplier A |
$ | $ | ||||||
Supplier B |
$ | $ | ||||||
Supplier C |
$ | $ |
2020 |
2019 |
2018 |
||||||||||
Product A |
% | % | % | |||||||||
Product B |
% | % | % | |||||||||
Product C |
% | % | % | |||||||||
Product D |
% | % | % |
2020 |
2019 |
|||||||
Accounts receivable |
$ | $ | ||||||
Less: Allowance for credit losses |
( |
) | ( |
) | ||||
$ | $ | |||||||
2020 |
2019 |
|||||||
Beginning balance |
$ | ( |
) | $ | ( |
) | ||
Provision for credit losses |
( |
) | ( |
) | ||||
Write-offs |
||||||||
Recoveries |
( |
) | ( |
) | ||||
Ending balance |
$ | ( |
) | $ | ( |
) | ||
2020 |
2019 |
|||||||
Raw materials and supplies |
$ | $ | ||||||
Finished goods |
||||||||
Gross |
||||||||
Excess and obsolete reserves |
( |
) | ( |
) | ||||
$ | $ | |||||||
2020 |
2019 |
|||||||
Balance, beginning of period |
$ | ( |
) | $ | ( |
) | ||
Provision for losses |
( |
) | ( |
) | ||||
Write-offs |
||||||||
$ | ( |
) | $ | ( |
) | |||
2020 |
2019 |
|||||||
Computer equipment and software |
$ | $ | ||||||
Leasehold improvements |
||||||||
Furniture and fixtures |
||||||||
Machinery and equipment |
||||||||
Assets not yet placed in service |
||||||||
Less accumulated depreciation |
( |
) | ( |
) | ||||
$ | $ | |||||||
U.S. |
International |
Consolidated |
||||||||||
Balance at December 31, 2020 and 2019 |
$ |
$ |
$ |
|||||||||
2020 |
2019 |
|||||||
Intellectual property |
$ |
$ |
||||||
Distribution rights |
||||||||
Customer relationships |
||||||||
IPR&D |
||||||||
Developed technology and other |
||||||||
Total carrying amount |
||||||||
Less accumulated amortization: |
||||||||
Intellectual property |
( |
) |
( |
) | ||||
Distribution rights |
( |
) |
( |
) | ||||
Customer relationships |
( |
) |
( |
) | ||||
Developed technology and other |
( |
) |
( |
) | ||||
Total accumulated amortization |
( |
) |
( |
) | ||||
Intangible assets, net before currency translation |
||||||||
Currency translation |
( |
) | ||||||
$ |
$ |
|||||||
2020 |
2019 |
|||||||
Gross-to-net deductions |
$ | $ | ||||||
Bonus and commission |
||||||||
Reserve for estimated overpayments from third-party payers |
||||||||
Compensation and benefits |
||||||||
Income and other taxes |
||||||||
Other liabilities |
||||||||
$ | $ | |||||||
Cash and cash equivalents |
$ | |||
Intellectual property (10-year useful life) |
||||
IPR&D |
||||
Other assets |
||||
Accounts payable and accrued liabilities |
( |
) | ||
Other current liabilities |
( |
) | ||
Other long-term liabilities |
( |
) | ||
Deferred income tax |
( |
) | ||
Estimated fair value of net assets acquired |
||||
Bioventus purchase price |
||||
Fair value of Harbor’s noncontrolling interest |
||||
$ | ||||
2020 |
2019 |
|||||||
Cash and cash equivalents |
$ | $ | ||||||
Property and equipment, net |
||||||||
Intangible assets, net |
||||||||
Operating lease assets |
||||||||
Other assets |
||||||||
$ | $ | |||||||
Accounts payable and accrued liabilities |
$ | $ | ||||||
Other current liabilities |
||||||||
Deferred income tax |
||||||||
Other long-term liabilities |
||||||||
$ | $ | |||||||
Quarterly payment |
||||
2021 and 2022 |
$ | |||
2023 and 2024 |
$ |
Leverage ratio |
Eurodollar |
BR |
||||||
> 2.50 to 1.00 |
% | % | ||||||
>1.50 to 1.00 and < 2.50 to 1.00 |
% | % | ||||||
> 1.25 to 1.00 and <1.50 to 1.00 |
% | % | ||||||
> 0.75 to 1.00 and <1.25 to 1.00 |
% | % | ||||||
< 0.75 to 1.00 |
% | % |
Leverage ratio |
Commitment fee rate |
|||
> 2.50 to 1.00 |
% | |||
>1.50 to 1.00 and < 2.50 to 1.00 |
% | |||
> 1.25 to 1.00 and <1.50 to 1.00 |
% | |||
> 0.75 to 1.00 and <1.25 to 1.00 |
% | |||
< 0.75 to 1.00 |
% |
2021 |
$ | |||
2022 |
||||
2023 |
||||
2024 |
||||
2025 and thereafter |
||||
Deferred financing costs |
( |
) | ||
Original issue discount |
( |
) | ||
Total long-term debt |
||||
Less current portion |
( |
) | ||
Total |
$ | |||
2020 |
2019 |
|||||||
Preferred |
$ | $ | ||||||
Common |
||||||||
Profits interest and other equity awards (Refer to Note 9. Equity-based compensation |
||||||||
$ | $ | |||||||
December 31, 2020 |
December 31, 2019 |
|||||||||||||||
Total |
Level 2 |
Level 3 |
Level 3 |
|||||||||||||
Interest rate swap |
$ | $ | $ | $ | ||||||||||||
Management incentive plan and liability-classified awards |
||||||||||||||||
Equity Participation Rights |
||||||||||||||||
Total liabilities |
$ | $ | $ | $ | ||||||||||||
Balance at December 31, 2018 |
$ | |||
Initial estimate (vesting) |
||||
Forfeitures |
( |
) | ||
Change in fair value |
||||
Payment |
( |
) | ||
Balance at December 31, 2019 |
||||
Initial estimate (vesting) |
||||
Forfeitures |
( |
) | ||
Change in fair value |
||||
Payment |
( |
) | ||
Balance at December 31, 2020 |
$ | |||
Balance at December 31, 2018 |
$ | |||
Change in fair value |
||||
Balance at December 31, 2019 |
||||
Change in fair value |
||||
Balance at December 31, 2020 |
$ | |||
Valuation technique |
Unobservable inputs |
Range |
Weighted Average | |||
Option pricing approach | Time to liquidity event | |||||
Risk free rate | ||||||
Equality volatility | ||||||
Equity value | $ |
$ | ||||
Lack of marketability discount |
Employee severance and temporary labor costs |
Other charges |
Total |
||||||||||
Balance at December 31, 2018 |
$ | $ | $ | |||||||||
Expenses incurred |
||||||||||||
Payments made |
( |
) | ( |
) | ( |
) | ||||||
Balance at December 31, 2019 |
||||||||||||
Expenses incurred |
||||||||||||
Payments made |
( |
) | ( |
) | ( |
) | ||||||
Balance at December 31, 2020 |
$ | $ | $ | |||||||||
2012 Phantom Units |
2015 Phantom Units |
|||||||||||||||
(awards in thousands) |
Number of awards |
Weighted average grant-date fair value |
Number of awards |
Weighted average grant-date fair value |
||||||||||||
Outstanding at December 31, 2019 |
$ | $ | ||||||||||||||
Granted |
$ | $ | ||||||||||||||
Converted to cash |
$ | ( |
) | $ | ||||||||||||
Forfeited |
$ | ( |
) | $ | ||||||||||||
Outstanding at December 31, 2020 |
$ | $ | ||||||||||||||
Awards vested at December 31, 2020 |
$ | $ | ||||||||||||||
2012 Phantom Units |
2015 Phantom Units |
|||||||||||||||
(awards in thousands) |
Number of awards |
Weighted average grant-date fair value |
Number of awards |
Weighted average grant-date fair value |
||||||||||||
Nonvested at December 31, 2019 |
$ | $ | ||||||||||||||
Vested during 2020 |
$ | $ | ||||||||||||||
Nonvested at December 31, 2020 |
$ | $ |
2020 |
2019 |
2018 |
||||||||||
Taxable subsidiaries: |
||||||||||||
Domestic |
$ | $ | $ | |||||||||
Foreign |
( |
) | ||||||||||
Other domestic subsidiaries |
||||||||||||
Income from continuing operations before income taxes |
$ | $ | $ | |||||||||
2020 |
2019 |
2018 |
||||||||||
Federal income taxes: |
||||||||||||
Current |
$ | $ | $ | |||||||||
Deferred |
( |
) | ( |
) | ( |
) | ||||||
Foreign income taxes: |
||||||||||||
Current |
||||||||||||
Deferred |
— | — | ||||||||||
State income taxes: |
||||||||||||
Current |
||||||||||||
Deferred |
( |
) | ( |
) | ( |
) | ||||||
Change in tax rates - deferred |
— | — | ||||||||||
Income tax expense |
$ | $ | $ | |||||||||
2020 |
2019 |
2018 |
||||||||||
U.S. statutory federal corporate income tax rate |
% | % | % | |||||||||
LLC flow-through structure |
( |
) | ( |
) | ( |
) | ||||||
State and local income taxes, net of federal benefit |
||||||||||||
Foreign rate differential |
||||||||||||
Provision to return adjustment |
— | |||||||||||
Effective income tax rate |
% | % | % | |||||||||
2020 |
2019 |
|||||||
Deferred tax assets: |
||||||||
Net operating losses |
$ | $ | ||||||
Tax credit carryforwards and other |
||||||||
Gross deferred tax assets |
||||||||
Valuation allowance |
( |
) | ( |
) | ||||
Total deferred tax assets |
||||||||
Deferred tax liability: |
||||||||
Acquired intangible |
||||||||
Net deferred tax liability |
$ | $ | ||||||
2020 |
2019 |
|||||||
Operating lease cost |
$ | $ | ||||||
Short-term lease cost* |
||||||||
Total lease cost |
$ | $ | ||||||
*Includes | variable lease cost and sublease income, which are immaterial. |
2020 |
2019 |
|||||||
Cash paid for amounts included in the measurement of operating lease liabilities: |
$ | $ | ||||||
Right-of-use assets obtained in exchange for operating lease obligations: |
$ | $ |
2020 |
2019 |
|||||||
Operating lease assets |
$ | $ | ||||||
Operating lease liabilities—current |
$ | $ | ||||||
Operating lease liabilities—noncurrent |
||||||||
Total operating lease liabilities |
$ | $ | ||||||
Weighted average remaining operating lease term in years |
||||||||
Weighted average discount rate for operating leases |
% | % |
Operating leases |
||||
2021 |
$ | |||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
||||
Thereafter |
||||
Total future lease payments |
||||
Less imputed interest |
( |
) | ||
Present value of future lease payments |
$ | |||
2020 |
2019 |
2018 |
||||||||||
Net income from continuing operations |
$ | $ | $ | |||||||||
Loss attributable to noncontrolling interest |
— | |||||||||||
$ | $ | $ | ||||||||||
Net income from continuing operations attributable to unit holders |
$ | $ | $ | |||||||||
Accumulated and unpaid preferred distributions |
( |
) | ( |
) | ( |
) | ||||||
Net income allocated to participating shareholders |
( |
) | ( |
) | — | |||||||
Net income (loss) from continuing operations attributable to common unit holders |
( |
) | ||||||||||
Loss from discontinued operations, net of tax |
— | |||||||||||
Net income (loss) attributable to common unit holders |
$ | $ | ( |
) | $ | ( |
) | |||||
Net income (loss) per unit attributable to common unit holders - basic and diluted |
||||||||||||
Net income (loss) from continuing operations |
$ | $ | $ | ( |
) | |||||||
Loss from discontinued operations, net of tax |
— | |||||||||||
Net income (loss) attributable to common unit holders |
$ | $ | ( |
) | $ | ( |
) | |||||
Weighted average common units outstanding, basic and diluted |
2020 |
2019 |
2018 |
||||||||||
Primary geographic markets: |
||||||||||||
U.S. |
$ | $ | $ | |||||||||
International |
||||||||||||
Total net sales |
$ | $ | $ | |||||||||
Vertical: |
||||||||||||
OA joint pain treatment and joint preservation |
$ | $ | $ | |||||||||
Minimally invasive fracture treatment |
||||||||||||
Bone graft substitutes |
||||||||||||
Total net sales |
$ | $ | $ | |||||||||
2020 |
2019 |
2018 |
||||||||||
Segment adjusted EBITDA from continuing operations |
||||||||||||
U.S. |
$ | $ | $ | |||||||||
International |
||||||||||||
Depreciation and amortization |
( |
) | ( |
) | ( |
) | ||||||
Interest expense |
( |
) | ( |
) | ( |
) | ||||||
Equity compensation |
( |
) | ( |
) | ( |
) | ||||||
COVID-19 benefits, net |
— | — | ||||||||||
Succession and transition charges |
( |
) | — | — | ||||||||
Restructuring costs |
( |
) | ( |
) | ( |
) | ||||||
Foreign currency impact |
( |
) | ( |
) | ||||||||
Equity loss in unconsolidated investments |
( |
) | — | — | ||||||||
Other non-recurring costs |
( |
) | ( |
) | ( |
) | ||||||
Income from continuing operations before income taxes |
$ | $ | $ | |||||||||
2019 |
2018 |
|||||||
Research and development expense |
$ | $ | ||||||
Loss on disposal |
||||||||
Income tax benefit |
( |
) | ( |
) | ||||
Loss from discontinued operations, net of tax |
$ | $ | ||||||
• | The Company amended and restated its limited liability company agreement (New LLC Agreement) to, among other things, (i) provide for the new single class of common membership interests in the Company as discussed in Note 1. Organization and basis of presentation for financial information |
• | The New LLC Owner amended and restated its certificate of incorporation to, among other things, (i) provide for Class A common stock and Class B common stock, each share of which entitles its holders to one vote per share on all matters presented to the New LLC Owner’s stockholders and (ii) issue |
• | The New LLC Owner acquired, by merger, the Former LLC Owners and upon consummation of the merger, owned |
• | The New LLC Owner closed an IPO of |
Three Months Ended |
Six Months Ended |
|||||||||||||||
July 3, 2021 |
June 27, 2020 |
July 3, 2021 |
June 27, 2020 |
|||||||||||||
Net sales |
$ | $ | $ | $ | ||||||||||||
Cost of sales (including depreciation and amortization of $ |
||||||||||||||||
Gross profit |
||||||||||||||||
Selling, general and administrative expense |
||||||||||||||||
Research and development expense |
||||||||||||||||
Change in fair value of contingent consideration |
||||||||||||||||
Depreciation and amortization |
||||||||||||||||
Impairment of variable interest entity assets |
||||||||||||||||
Operating (loss) income |
( |
) | ( |
) | ||||||||||||
Interest expense (income) |
( |
) | ||||||||||||||
Other expense (income) |
( |
) | ( |
) | ||||||||||||
Other expense |
||||||||||||||||
(Loss) income before income taxes |
( |
) | ( |
) | ||||||||||||
Income tax expense (benefit) |
( |
) | ( |
) | ||||||||||||
Net (loss) income |
( |
) | ( |
) | ||||||||||||
Loss attributable to noncontrolling interest |
||||||||||||||||
Net (loss) income attributable to Bioventus Inc. |
$ | ( |
) | $ | ( |
) | $ | $ | ||||||||
Net (loss) income |
$ | ( |
) | $ | ( |
) | $ | $ | ||||||||
Other comprehensive income (loss), net of tax |
||||||||||||||||
Change in foreign currency translation adjustments |
( |
) | ( |
) | ||||||||||||
Comprehensive (loss) income |
( |
) | ( |
) | ||||||||||||
Comprehensive loss attributable to noncontrolling interest |
||||||||||||||||
Comprehensive (loss) income attributable to Bioventus Inc. |
$ | ( |
) | $ | ( |
) | $ | $ | ||||||||
Loss per share of Class A common stock, basic and diluted (1) : |
$ | ( |
) | $ | ( |
) | ||||||||||
Weighted-average shares of Class A common stock outstanding, basic and diluted (1) : |
||||||||||||||||
(1) |
Per share information for the six months ended July 3, 2021 represents loss per share of Class A common stock and weighted-average shares of Class A common stock outstanding from February 16, 2021 through July 3, 2021, the period following Bioventus Inc.’s initial public offering and related transactions described in Note 1. Organization Note 7. Earnings per share Notes to the Unaudited Condensed Consolidated Financial Statements. |
July 3, 2021 |
December 31, 2020 |
|||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | $ | ||||||
Restricted cash |
— | |||||||
Accounts receivable, net |
||||||||
Inventory |
||||||||
Prepaid and other current assets |
||||||||
Total current assets |
||||||||
Property and equipment, net |
||||||||
Goodwill |
||||||||
Intangible assets, net |
||||||||
Operating lease assets |
||||||||
Deferred tax assets |
— | |||||||
Investment and other assets |
||||||||
Total assets |
$ | $ | ||||||
Liabilities and Stockholders’ and Members’ Equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | $ | ||||||
Accrued liabilities |
||||||||
Accrued equity-based compensation |
||||||||
Current portion of long-term debt |
||||||||
Current portion of contingent consideration |
— | |||||||
Other current liabilities |
||||||||
Total current liabilities |
||||||||
Long-term debt, less current portion |
||||||||
Accrued equity-based compensation, less current portion |
— | |||||||
Deferred income taxes |
||||||||
Contingent consideration, less current portion |
— | |||||||
Other long-term liabilities |
||||||||
Total liabilities |
||||||||
Commitments and contingencies (Note 8) |
||||||||
Stockholders’ and Members’ Equity: |
||||||||
Members’ equity |
— | |||||||
Preferred stock, $ |
||||||||
Class A common stock, $ |
— | |||||||
Class B common stock, $ |
— | |||||||
Additional paid-in capital |
— | |||||||
Accumulated deficit |
( |
) | — | |||||
Accumulated other comprehensive income |
— | |||||||
Total stockholders’ equity attributable to Bioventus Inc. and members’ equity |
||||||||
Noncontrolling interest |
— | |||||||
Total stockholders’ and members’ equity |
||||||||
Total liabilities and stockholders’ and members’ equity |
$ | $ | ||||||
Class A Common Stock |
Class B Common Stock |
|||||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Additional Paid-In -Capital |
Accumulated other comprehensive income |
Accumulated Deficit |
Non- controlling interest |
Total Stockholders’ and members’ equity |
||||||||||||||||||||||||||||
Balance at Balance at April 3, 2021 |
$ | $ | $ | $ | $ | ( |
) | $ | $ | |||||||||||||||||||||||||||
Issuance of Class A common stock |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||
Distribution of Continuing LLC Owner |
— | — | — | — | ( |
) | — | — | ( |
) | ||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||
Deconsolidation of variable interest entity |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Equity based compensation |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||
Translation adjustment |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||
Balance at July 3, 2021 |
$ | $ | $ | $ | $ | ( |
) | $ | $ | |||||||||||||||||||||||||||
Members’ equity |
||||
Balance at Balance at March 28, 2020 |
$ | |||
Distribution to members |
( |
) | ||
Net loss |
( |
) | ||
Translation adjustment |
||||
Balance at June 27, 2020 |
$ | |||
Class A Common Stock |
Class B Common Stock |
|||||||||||||||||||||||||||||||||||||||
Members’ equity |
Shares |
Amount |
Shares |
Amount |
Additional Paid-In -Capital |
Accumulated other comprehensive income |
Accumulated Deficit |
Non- controlling interest |
Total Stockholders’ and members’ equity |
|||||||||||||||||||||||||||||||
Balance at December 31, 2020 |
$ | — | $— | — | $— | $ | — | $ | — | $ | — | $ | — | $ | ||||||||||||||||||||||||||
Refund from members |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Other equity forfeiture |
( |
) | — | — | — | — | — | — | — | — | ( |
) | ||||||||||||||||||||||||||||
Net income prior to Organizational Transactions |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Translation adjustment prior to Organizational Transactions |
( |
) | — | — | — | — | — | — | — | — | ( |
) | ||||||||||||||||||||||||||||
Effect of Organizational Transactions |
( |
) | — | — | ( |
) | ||||||||||||||||||||||||||||||||||
Initial public offering, net of offering costs |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Issuance of Class A common stock |
— | |||||||||||||||||||||||||||||||||||||||
Distribution to Continuing LLC Owner |
— | — | — | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||||||||
Net loss subsequent to Organizational Transactions |
— | — | — | — | — | — | — | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||||||
Deconsolidation of variable interest entity |
— | — | ||||||||||||||||||||||||||||||||||||||
Equity based compensation subsequent to Organizational Transactions |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Translation adjustment subsequent to Organizational Transactions |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Balance at July 3, 2021 |
$ | $ | $ | $ | $ | $ | ( |
) | $ | $ | ||||||||||||||||||||||||||||||
Members’ equity |
||||
Balance at December 31, 2019 |
$ | |||
Profits interest forfeiture |
( |
) | ||
Distribution to members |
( |
) | ||
Debt conversion |
||||
Net income |
||||
Translation adjustment |
( |
) | ||
Balance at June 27, 2020 |
$ | |||
Six Months Ended |
||||||||
July 3, 2021 |
June 27, 2020 |
|||||||
Operating activities: |
||||||||
Net income |
$ | $ | ||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities from continuing operations: |
||||||||
Depreciation and amortization |
||||||||
(Recovery) provision for expected credit losses |
( |
) | ||||||
Equity-based compensation from 2021 Stock Incentive Plan |
||||||||
Profits interest plan, liability-classified and other equity awards compensation |
( |
) | ( |
) | ||||
Change in fair value of contingent consideration |
||||||||
Change in fair value of interest rate swap |
( |
) | ||||||
Change in fair value of Equity Participation Rights unit |
( |
) | ( |
) | ||||
Impairments related to variable interest entity |
||||||||
Other, net |
( |
) | ( |
) | ||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable |
( |
) | ||||||
Inventories |
( |
) | ||||||
Accounts payable and accrued expenses |
||||||||
Other current assets and liabilities |
( |
) | ( |
) | ||||
Net cash from operating activities |
( |
) | ||||||
Investing activities: |
||||||||
Purchase of Bioness, Inc, net of cash acquired |
( |
) | ||||||
Purchase of property and equipment |
( |
) | ( |
) | ||||
Other |
( |
) | ( |
) | ||||
Net cash from investing activities |
( |
) | ( |
) | ||||
Net cash from investing activities - discontinued operations |
||||||||
Net cash from investing activities |
( |
) | ( |
) | ||||
Financing activities: |
||||||||
Proceeds from issuance of Class A common stock sold in initial public offering, net of underwriting discounts and offering costs |
||||||||
Proceeds from issuance of Class A and B common stock |
||||||||
Borrowing on revolver |
||||||||
Payments on long-term debt |
( |
) | ( |
) | ||||
Refunds (distributions) - members |
( |
) | ||||||
Other, net |
( |
) | ||||||
Net cash from financing activities |
||||||||
Effect of exchange rate changes on cash |
( |
) | ( |
) | ||||
Net change in cash, cash equivalents and restricted cash |
||||||||
Cash, cash equivalents and restricted cash at the beginning of the period |
||||||||
Cash, cash equivalents and restricted cash at the end of the period |
$ | $ | ||||||
Supplemental disclosure of noncash investing and financing activities |
||||||||
Accrued member distributions |
$ | $ | ||||||
Accounts payable for purchase of property, plant and equipment |
$ | $ | ||||||
July 3, 2021 |
December 31, 2020 |
|||||||
Cash and cash equivalents |
$ | $ | ||||||
Restricted cash |
||||||||
$ | $ | |||||||
July 3, 2021 |
December 31, 2020 |
|||||||
Accounts receivable |
$ | $ | ||||||
Less: Allowance for credit losses |
( |
) | ( |
) | ||||
$ | $ | |||||||
Three Months Ended |
Six Months Ended |
|||||||||||||||
July 3, 2021 |
June 27, 2020 |
July 3, 2021 |
June 27, 2020 |
|||||||||||||
Beginning balance |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
Recovery (provision) |
( |
) | ( |
) | ||||||||||||
Write-offs |
||||||||||||||||
Recoveries |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Ending balance |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
July 3, 2021 |
December 31, 2020 |
|||||||
Raw materials and supplies |
$ | $ | ||||||
Finished goods |
||||||||
Gross |
||||||||
Excess and obsolete reserves |
( |
) | ( |
) | ||||
$ | $ | |||||||
July 3, 2021 |
December 31, 2020 |
|||||||
Gross-to-net |
$ | $ | ||||||
Bonus and commission |
||||||||
Compensation and benefits |
||||||||
Income and other taxes |
||||||||
Other liabilities |
||||||||
$ | $ | |||||||
Consideration |
||||
Cash consideration at closing |
$ | |||
Contingent consideration at fair value |
||||
Total Bioness consideration |
$ | |||
• | $ |
• | $ |
• | Up to $ |
• | $ |
Fair value of consideration |
$ | |||
Assets acquired and liabilities assumed: |
||||
Cash, cash equivalents and restricted cash (a) |
||||
Accounts receivable |
||||
Inventory |
||||
Prepaid and other current assets |
||||
Property and equipment |
||||
Intangible assets |
||||
Operating lease assets |
||||
Other assets |
||||
Accounts payable and accrued liabilities |
( |
) | ||
Other current liabilities |
( |
) | ||
Other liabilities |
( |
) | ||
Net assets acquired |
||||
Resulting goodwill (b) |
$ | |||
(a) |
Consists of cash and cash equivalents of $ |
Small business Administration. Bioness received proceeds of $ |
(b) |
The U.S. segment was allocated the resulting goodwill from the Bioness acquisition. |
Useful Life (in years) |
Fair Value |
|||||||
Intellectual property |
$ | |||||||
IPR&D |
N/A | |||||||
Customer relationships |
||||||||
|
|
|||||||
$ | ||||||||
|
|
Three Months Ended |
Six Months Ended |
|||||||||||||||
July 3, 2021 |
June 27, 2020 |
July 3, 2021 |
June 27, 2020 |
|||||||||||||
Net sales |
$ | $ | $ | $ | ||||||||||||
Net (loss) income |
$ | ( |
) | $ | ( |
) | $ | $ | ( |
) | ||||||
Earnings per share of Class A common stock(1): |
||||||||||||||||
Basic and diluted |
$ | ( |
) | $ | ( |
) |
December 31, 2020 |
||||
Cash and cash equivalents |
$ | |||
Property and equipment, net |
||||
Intangible assets, net |
||||
Operating lease assets |
||||
Other assets |
||||
|
|
|||
$ | ||||
|
|
|||
Accounts payable and accrued liabilities |
$ | |||
Other current liabilities |
||||
Other long-term liabilities |
||||
|
|
|||
$ | ||||
|
|
July 3, 2021 |
December 31, 2020 |
|||||||
Term loan due December 2024 ( |
$ | $ | ||||||
Less: |
||||||||
Current portion of long-term debt |
( |
) | ( |
) | ||||
Unamortized debt issuance cost |
( |
) | ( |
) | ||||
Unamortized discount |
( |
) | ( |
) | ||||
$ | $ | |||||||
July 3, 2021 |
December 31, 2020 |
|||||||||||||||||||||||
Total |
Level 2 |
Level 3 |
Total |
Level 2 |
Level 3 |
|||||||||||||||||||
Interest rate swap |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Current portion of contingent consideration |
||||||||||||||||||||||||
Long-term contingent consideration, less current portion |
||||||||||||||||||||||||
Management incentive plan and liability-classified awards |
||||||||||||||||||||||||
Equity Participation Right |
||||||||||||||||||||||||
Total liabilities |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Valuation Technique |
Unobservable inputs |
Range | ||||
Bioness contingent consideration |
Discounted cash flow | Payment discount rate | ||||
Payment period | 2021 - 2025 |
Balance at December 31, 2020 |
$ | |||
Change in fair value |
( |
) | ||
Initial estimate (vesting) |
||||
Payments |
( |
) | ||
Phantom plan conversion to Class A common stock |
( |
) | ||
Balance at July 3, 2021 |
$ | |||
Balance at December 31, 2020 |
$ | |||
Change in fair value |
( |
) | ||
Payment |
( |
) | ||
Balance at July 3, 2021 |
$ | |||
Number of units |
Weighted- average grant- date fair value per unit |
|||||||
Outstanding at December 31, 2020 |
$ | |||||||
Granted |
||||||||
Outstanding at April 3, 2021 |
||||||||
Granted |
||||||||
Forfeited/canceled |
( |
) | ||||||
Outstanding at July 3, 2021 |
$ | |||||||
Risk-free interest rate |
||||
Expected dividend yield |
||||
Expected stock price volatility |
||||
Expected life of stock options |
- |
|||
Weighted-average fair value of stock options granted |
$ |
Number of options |
Weighted- average exercise price |
Weighted average remaining contractual term |
||||||||||
Outstanding at December 31, 2020 |
$ | |||||||||||
Granted |
||||||||||||
Outstanding at April 3, 2021 |
||||||||||||
Granted |
||||||||||||
Outstanding at July 3, 2021 |
||||||||||||
Three Months Ended July 3, 2021 |
February 16, 2021 through July 3, 2021 |
|||||||
Numerator: |
||||||||
Net loss |
$ | ( |
) | $ | ( |
) | ||
Net loss attributable to noncontrolling interests |
||||||||
Net loss attributable to Bioventus Inc. Class A common stockholders |
$ | ( |
) | $ | ( |
) | ||
Denominator: |
||||||||
Weighted-average shares of Class A common stock outstanding - basic and diluted |
||||||||
Net loss per share of Class A common stock, basic and diluted |
$ | ( |
) | $ | ( |
) | ||
Three Months Ended July 3, 2021 |
Six Months Ended July 3, 2021 |
|||||||
LLC Interests held by Continuing LLC Owner (a) |
||||||||
Stock options |
||||||||
RSUs |
||||||||
Unvested shares of Class A common stock |
||||||||
Total |
||||||||
(a) |
Class A Shares reserved for future issuance upon redemption or exchange of LLC Interests by Continuing LLC Owner. |
Three Months Ended |
Six Months Ended |
|||||||||||||||
July 3, 2021 |
June 27, 2020 |
July 3, 2021 |
June 27, 2020 |
|||||||||||||
Operating lease cost |
$ | $ | $ | $ | ||||||||||||
Short-term lease cost (a) |
||||||||||||||||
Total lease cost |
$ | $ | $ | $ | ||||||||||||
• | Includes variable lease cost and sublease income, which are immaterial. |
Six Months Ended |
||||||||
July 3, 2021 |
June 27, 2020 |
|||||||
Operating cash flows from operating leases |
$ | $ |
July 3, 2021 |
December 31, 2020 |
|||||||
Operating lease assets |
$ | $ | ||||||
Operating lease liabilities- current |
$ | $ | ||||||
Operating lease liabilities- noncurrent |
||||||||
Total operating lease liabilities |
$ | $ | ||||||
Weighted average remaining lease term (years) |
||||||||
Weighted average discount rate |
% | % |
Three Months Ended |
Six Months Ended |
|||||||||||||||
July 3, 2021 |
June 27, 2020 |
July 3, 2021 |
June 27, 2020 |
|||||||||||||
Primary geographic markets: |
||||||||||||||||
U.S. |
$ | $ | $ | $ | ||||||||||||
International |
||||||||||||||||
Total net sales |
$ | $ | $ | $ | ||||||||||||
Vertical: |
||||||||||||||||
Pain Treatments and Joint Preservation |
$ | $ | $ | $ | ||||||||||||
Restorative Therapies |
||||||||||||||||
Bone Graft Substitutes |
||||||||||||||||
Total net sales |
$ | $ | $ | $ | ||||||||||||
Three Months Ended |
Six Months Ended |
|||||||||||||||
July 3, 2021 |
June 27, 2020 |
July 3, 2021 |
June 27, 2020 |
|||||||||||||
Segment adjusted EBITDA |
||||||||||||||||
U.S. |
$ | $ | $ | $ | ||||||||||||
International |
( |
) | ||||||||||||||
Depreciation and amortization |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Interest (expense) income |
( |
) | ( |
) | ( |
) | ||||||||||
Equity compensation |
( |
) | ( |
) | ||||||||||||
COVID-19 benefits, net |
— | — | ||||||||||||||
Succession and transition charges |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Foreign currency impact |
( |
) | ||||||||||||||
Acquisition and integration costs |
( |
) | — | ( |
) | — | ||||||||||
Inventory step-up costs |
( |
) | — | ( |
) | |||||||||||
Equity loss in unconsolidated investments |
( |
) | — | ( |
) | — | ||||||||||
Change in fair value of contingent consideration |
( |
) | — | ( |
) | — | ||||||||||
Impairments related to variable interest entity |
( |
) | — | ( |
) | — | ||||||||||
Other non-recurring costs |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
(Loss) income before income taxes |
$ | ( |
) | $ | ( |
) | $ | $ | ||||||||
|
|
|
|
|
|
|
|
Page | ||||||
ARTICLE I. THE MERGERS |
A-6 | |||||
Section 1.1 |
The Mergers; Effect of Mergers | A-6 | ||||
Section 1.2 |
Closing; Effective Time | A-6 | ||||
Section 1.3 |
Certificate of Incorporation and Bylaws | A-6 | ||||
Section 1.4 |
Directors and Officers | A-7 | ||||
Section 1.5 |
Treatment of Capital Stock in the Mergers | A-7 | ||||
Section 1.6 |
Dissenting Shares | A-8 | ||||
Section 1.7 |
Proration | A-9 | ||||
Section 1.8 |
Certain Adjustments | A-9 | ||||
Section 1.9 |
Treatment of Equity Awards | A-10 | ||||
Section 1.10 |
No Fractional Shares | A-10 | ||||
Section 1.11 |
Closing of Transfer Books | A-11 | ||||
Section 1.12 |
Exchange of Certificates and Cancellation of Book-Entry Positions | A-11 | ||||
Section 1.13 |
Further Action | A-14 | ||||
Section 1.14 |
Tax Withholding | A-14 | ||||
Section 1.15 |
Election Procedures | A-14 | ||||
ARTICLE II. REPRESENTATIONS AND WARRANTIES OF THE COMPANY |
A-15 | |||||
Section 2.1 |
Due Organization and Good Standing; Subsidiaries | A-15 | ||||
Section 2.2 |
Organizational Documents | A-15 | ||||
Section 2.3 |
Capitalization | A-16 | ||||
Section 2.4 |
Authority; Binding Nature of Agreement | A-16 | ||||
Section 2.5 |
Vote Required | A-17 | ||||
Section 2.6 |
Non-Contravention; Consents |
A-17 | ||||
Section 2.7 |
Reports; Financial Statements; Internal Controls | A-18 | ||||
Section 2.8 |
Absence of Certain Changes | A-20 | ||||
Section 2.9 |
Intellectual Property and Related Matters | A-20 | ||||
Section 2.10 |
Title to Assets; Real Property | A-22 | ||||
Section 2.11 |
Contracts | A-22 | ||||
Section 2.12 |
Compliance with Legal Requirements | A-24 | ||||
Section 2.13 |
Legal Proceedings; Investigations; Orders | A-25 | ||||
Section 2.14 |
Certain Business Practices | A-25 | ||||
Section 2.15 |
Tax Matters | A-26 | ||||
Section 2.16 |
Employee Benefit Plans | A-27 | ||||
Section 2.17 |
Labor Matters | A-28 | ||||
Section 2.18 |
Environmental Matters | A-29 | ||||
Section 2.19 |
Insurance | A-29 | ||||
Section 2.20 |
Product Defects and Warranties | A-29 | ||||
Section 2.21 |
Regulatory Matters | A-30 | ||||
Section 2.22 |
Takeover Statutes | A-32 | ||||
Section 2.23 |
Ownership of Parent Class A Common Stock | A-32 | ||||
Section 2.24 |
Opinion of Financial Advisor | A-32 | ||||
Section 2.25 |
Brokers | A-32 | ||||
Section 2.26 |
Related Party Transactions | A-32 | ||||
Section 2.27 |
Information Supplied | A-33 |
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUISITION SUBS |
A-33 | |||||
Section 3.1 |
Due Organization and Good Standing; Subsidiaries | A-33 | ||||
Section 3.2 |
Organizational Documents | A-34 | ||||
Section 3.3 |
Capitalization | A-34 | ||||
Section 3.4 |
Authority; Binding Nature of Agreement | A-35 | ||||
Section 3.5 |
Vote Required | A-36 | ||||
Section 3.6 |
Non-Contravention; Consents |
A-36 | ||||
Section 3.7 |
Reports; Financial Statements; Internal Controls | A-36 | ||||
Section 3.8 |
Absence of Certain Changes | A-38 | ||||
Section 3.9 |
Compliance with Legal Requirements | A-38 | ||||
Section 3.10 |
Legal Proceedings; Investigations; Orders | A-39 | ||||
Section 3.11 |
Certain Business Practices | A-39 | ||||
Section 3.12 |
Regulatory Matters | A-40 | ||||
Section 3.13 |
Employee Benefit Plans | A-42 | ||||
Section 3.14 |
Labor Matters | A-42 | ||||
Section 3.15 |
Financing; Solvency | A-42 | ||||
Section 3.16 |
Takeover Statutes | A-43 | ||||
Section 3.17 |
Ownership of Company Common Stock | A-43 | ||||
Section 3.18 |
Intellectual Property | A-43 | ||||
Section 3.19 |
Tax Matters | A-44 | ||||
Section 3.20 |
Opinion of Financial Advisor | A-45 | ||||
Section 3.21 |
Brokers | A-45 | ||||
Section 3.22 |
Information Supplied | A-46 | ||||
Section 3.23 |
Data Privacy and Security | A-46 | ||||
Section 3.24 |
Parent Top Customers, Distributors and Suppliers | A-46 | ||||
Section 3.25 |
Product Defects and Warranties | A-46 | ||||
Section 3.26 |
Acquisition Subs | A-46 | ||||
ARTICLE IV. COVENANTS |
A-46 | |||||
Section 4.1 |
Interim Operations | A-46 | ||||
Section 4.2 |
Company No Solicitation | A-50 | ||||
Section 4.3 |
Parent No Solicitation | A-52 | ||||
Section 4.4 |
Registration Statement; Joint Proxy Statement/Prospectus | A-53 | ||||
Section 4.5 |
Meeting of the Company’s Stockholders; Company Change in Recommendation | A-55 | ||||
Section 4.6 |
Meeting of Parent’s Stockholders; Parent Change in Recommendation | A-58 | ||||
Section 4.7 |
Filings; Other Action | A-62 | ||||
Section 4.8 |
Access | A-64 | ||||
Section 4.9 |
Acquisition Sub Consents; Parent Vote | A-65 | ||||
Section 4.10 |
Publicity | A-65 | ||||
Section 4.11 |
Employee Matters | A-66 | ||||
Section 4.12 |
Certain Tax Matters | A-67 | ||||
Section 4.13 |
Indemnification; Directors’ and Officers’ Insurance | A-68 | ||||
Section 4.14 |
Financing and Financing Cooperation | A-69 | ||||
Section 4.15 |
Stockholder Litigation | A-72 | ||||
Section 4.16 |
Stock Exchange Listing and Delisting | A-73 | ||||
Section 4.17 |
Section 16 Matters | A-73 | ||||
Section 4.18 |
Director Resignations | A-73 | ||||
Section 4.19 |
Payoff Documentation | A-73 | ||||
Section 4.20 |
Takeover Statutes | A-73 |
ARTICLE V. CONDITIONS TO EACH PARTY’S OBLIGATION TO EFFECT THE MERGERS |
A-74 | |||||
Section 5.1 |
Conditions Precedent to Each Party’s Obligations | A-74 | ||||
Section 5.2 |
Additional Conditions Precedent to Parent’s Obligations | A-74 | ||||
Section 5.3 |
Additional Conditions Precedent to the Company’s Obligations | A-75 | ||||
ARTICLE VI. TERMINATION |
A-76 | |||||
Section 6.1 |
Termination | A-76 | ||||
Section 6.2 |
Effect of Termination | A-78 | ||||
Section 6.3 |
Termination Fees | A-78 | ||||
ARTICLE VII. MISCELLANEOUS PROVISIONS |
A-80 | |||||
Section 7.1 |
Amendment | A-80 | ||||
Section 7.2 |
Waiver | A-81 | ||||
Section 7.3 |
No Survival of Representations and Warranties | A-81 | ||||
Section 7.4 |
Entire Agreement; Non-Reliance; Third-Party Beneficiaries |
A-81 | ||||
Section 7.5 |
Applicable Law; Jurisdiction | A-83 | ||||
Section 7.6 |
Payment of Expenses | A-83 | ||||
Section 7.7 |
Assignability; Parties in Interest | A-83 | ||||
Section 7.8 |
Notices | A-84 | ||||
Section 7.9 |
Severability | A-85 | ||||
Section 7.10 |
Counterparts | A-85 | ||||
Section 7.11 |
Specific Performance | A-85 | ||||
Section 7.12 |
Disclosure Schedules | A-85 | ||||
Section 7.13 |
Non-Recourse |
A-86 | ||||
Section 7.14 |
Construction | A-86 |
Exhibit A |
Certain Definitions | |
Exhibit B-1 |
Company Support Agreement | |
Exhibit B-2 |
Parent Support Agreement | |
Exhibit C |
Form of First Certificate of Merger | |
Exhibit D |
Form of Second Certificate of Merger |
BIOVENTUS INC. | ||
a Delaware corporation | ||
By: | /s/ Ken Reali | |
Name: | Ken Reali | |
Title: | Chief Executive Officer | |
OYSTER MERGER SUB, INC. | ||
a Delaware corporation | ||
By: | /s/ Anthony D’Adamio | |
Name: | Anthony D’Adamio | |
Title: | President and Secretary | |
OYSTER MERGER SUB LLC | ||
a Delaware limited liability company | ||
By: | /s/ Anthony D’Adamio | |
Name: | Anthony D’Adamio | |
Title: | Authorized Person |
MISONIX, INC. | ||
a Delaware corporation | ||
By: | /s/ Joseph P. Dwyer | |
Name: | Joseph P. Dwyer | |
Title: | Chief Financial Officer |
767 Fifth Avenue New York, NY 10153 T 212.287.3200 F 212.287.3201 pwpartners.com |
1. | reviewed certain publicly available financial statements and other publicly available business and financial information with respect to the Company and Parent, including equity research analyst reports; |
2. | reviewed certain publicly available financial forecasts relating to the business and financial prospects of the Company, derived from a consensus of selected equity research analysts that were identified by the Company’s management and discussed with us by the Company for use in our analysis, as adjusted by Parent management, and which forecasts were extrapolated by the management of Parent for certain fiscal years (the “ Adjusted and Extrapolated Company Street Forecasts ”) and approved for our use by Parent; |
3. | reviewed certain publicly available financial forecasts relating to the business and financial prospects of Parent, derived from a consensus of selected equity research analysts that were identified by Parent’s management, as adjusted by the management of Parent (the “ Adjusted Parent Street Forecasts ”), and approved for our use by Parent; |
4. | reviewed certain internal financial statements, analyses and/or other financial and operating data relating to the business of the Company and Parent, prepared by the management of the Company and the management of Parent, respectively; |
5. | discussed the past and current business, operations, financial condition and prospects of the Company with representatives of the Company and Parent; |
6. | discussed the past and current business, operations, financial condition and prospects of Parent with representatives of Parent; |
7. | discussed with members of the senior managements of the Company and Parent their assessment of the strategic rationale for, and the potential benefits of, the Mergers; |
8. | reviewed certain estimates as to the amount and timing of certain cost savings anticipated by the management of Parent to result from the consummation of the Mergers (the “ Cost Savings ”), as prepared by the management of Parent and approved for our use by Parent; |
9. | compared the financial performance of the Company and Parent with that of certain publicly-traded companies which we believe to be generally relevant; |
10. | compared the financial terms of the Mergers with the publicly available financial terms of certain other transactions which we believe to be generally relevant; |
11. | reviewed the historical trading prices for the Company Common Stock and the Parent Class A Common Stock; |
12. | participated in discussions among representatives of the Company and Parent and their respective advisors; |
13. | reviewed a draft of the Merger Agreement dated July 28, 2021 (the “ Draft Merger Agreement ”); and |
14. | conducted such other financial studies, analyses and investigations, and considered such other factors, as we have deemed appropriate. |
Very truly yours, |
/s/ PERELLA WEINBERG PARTNERS LP |
a) | Any stockholder of a corporation of this State who holds shares of stock on the date of the making of a demand pursuant to subsection (d) of this section with respect to such shares, who continuously holds such shares through the effective date of the merger or consolidation, who has otherwise complied with subsection (d) of this section and who has neither voted in favor of the merger or consolidation nor consented thereto in writing pursuant to § 228 of this title shall be entitled to an appraisal by the Court of Chancery of the fair value of the stockholder’s shares of stock under the circumstances described in subsections (b) and (c) of this section. As used in this section, the word “stockholder” means a holder of record of stock in a corporation; the words “stock” and “share” mean and include what is ordinarily meant by those words; and the words “depository receipt” mean a receipt or other instrument issued by a depository representing an interest in 1 or more shares, or fractions thereof, solely of stock of a corporation, which stock is deposited with the depository. |
b) | Appraisal rights shall be available for the shares of any class or series of stock of a constituent corporation in a merger or consolidation to be effected pursuant to § 251 (other than a merger effected pursuant to § 251(g) of this title), § 252, § 254, § 255, § 256, § 257, § 258, § 263 or § 264 of this title: |
1. | Provided, however, that no appraisal rights under this section shall be available for the shares of any class or series of stock, which stock, or depository receipts in respect thereof, at the record date fixed to determine the stockholders entitled to receive notice of the meeting of stockholders to act upon the agreement of merger or consolidation (or, in the case of a merger pursuant to § 251(h), as of immediately prior to the execution of the agreement of merger), were either: (i) listed on a national securities exchange or (ii) held of record by more than 2,000 holders; and further provided that no appraisal rights shall be available for any shares of stock of the constituent corporation surviving a merger if the merger did not require for its approval the vote of the stockholders of the surviving corporation as provided in § 251(f) of this title. |
2. | Notwithstanding paragraph (b)(1) of this section, appraisal rights under this section shall be available for the shares of any class or series of stock of a constituent corporation if the holders thereof are required by the terms of an agreement of merger or consolidation pursuant to §§ 251, 252, 254, 255, 256, 257, 258, 263 and 264 of this title to accept for such stock anything except: |
a. | Shares of stock of the corporation surviving or resulting from such merger or consolidation, or depository receipts in respect thereof; |
b. | Shares of stock of any other corporation, or depository receipts in respect thereof, which shares of stock (or depository receipts in respect thereof) or depository receipts at the effective date of the merger or consolidation will be either listed on a national securities exchange or held of record by more than 2,000 holders; |
c. | Cash in lieu of fractional shares or fractional depository receipts described in the foregoing paragraphs (b)(2)a. and b. of this section; or |
d. | Any combination of the shares of stock, depository receipts and cash in lieu of fractional shares or fractional depository receipts described in the foregoing paragraphs (b)(2)a., b. and c. of this section. |
3. | In the event all of the stock of a subsidiary Delaware corporation party to a merger effected under § 253 or § 267 of this title is not owned by the parent immediately prior to the merger, appraisal rights shall be available for the shares of the subsidiary Delaware corporation. |
4. | [Repealed.] |
c) | Any corporation may provide in its certificate of incorporation that appraisal rights under this section shall be available for the shares of any class or series of its stock as a result of an amendment to its certificate of incorporation, any merger or consolidation in which the corporation is a constituent corporation or the sale of all or substantially all of the assets of the corporation. If the certificate of incorporation contains such a provision, the provisions of this section, including those set forth in subsections (d),(e) and (g) of this section, shall apply as nearly as is practicable. |
d) | Appraisal rights shall be perfected as follows: |
1. | If a proposed merger or consolidation for which appraisal rights are provided under this section is to be submitted for approval at a meeting of stockholders, the corporation, not less than 20 days prior to the meeting, shall notify each of its stockholders who was such on the record date for notice of such meeting (or such members who received notice in accordance with § 255(c) of this title) with respect to shares for which appraisal rights are available pursuant to subsection (b) or (c) of this section that appraisal rights are available for any or all of the shares of the constituent corporations, and shall include in such notice a copy of this section and, if one of the constituent corporations is a nonstock corporation, a copy of § 114 of this title. Each stockholder electing to demand the appraisal of such stockholder’s shares shall deliver to the corporation, before the taking of the vote on the merger or consolidation, a written demand for appraisal of such stockholder’s shares; provided that a demand may be delivered to the corporation by electronic transmission if directed to an information processing system (if any) expressly designated for that purpose in such notice. Such demand will be sufficient if it reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such stockholder’s shares. A proxy or vote against the merger or consolidation shall not constitute such a demand. A stockholder electing to take such action must do so by a separate written demand as herein provided. Within 10 days after the effective date of such merger or consolidation, the surviving or resulting corporation shall notify each stockholder of each constituent corporation who has complied with this subsection and has not voted in favor of or consented to the merger or consolidation of the date that the merger or consolidation has become effective; or |
2. | If the merger or consolidation was approved pursuant to § 228, § 251(h), § 253 or § 267 of this title, then either a constituent corporation before the effective date of the merger or consolidation or the surviving or resulting corporation within 10 days thereafter shall notify each of the holders of any class or series of stock of such constituent corporation who are entitled to appraisal rights of the approval of the merger or consolidation and that appraisal rights are available for any or all shares of such class or series of stock of such constituent corporation, and shall include in such notice a copy of this section and, if one of the constituent corporations is a nonstock corporation, a copy of § 114 of this title. Such notice may, and, if given on or after the effective date of the merger or consolidation, shall, also notify such stockholders of the effective date of the merger or consolidation. Any stockholder entitled to appraisal rights may, within 20 days after the date of giving such notice or, in the case of a merger approved pursuant to § 251(h) of this title, within the later of the consummation of the offer contemplated by § 251(h) of this title and 20 days after the date of giving such notice, demand in writing from the surviving or resulting corporation the appraisal of such holder’s shares; provided that a demand may be delivered to the corporation by electronic transmission if directed to an information processing system (if any) expressly designated for that purpose in such notice. Such demand will be sufficient if it reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such holder’s shares. If such notice did not notify stockholders of the effective date of the merger or consolidation, either (i) each such constituent corporation shall send a second notice before the effective date of the merger or |
consolidation notifying each of the holders of any class or series of stock of such constituent corporation that are entitled to appraisal rights of the effective date of the merger or consolidation or (ii) the surviving or resulting corporation shall send such a second notice to all such holders on or within 10 days after such effective date; provided, however, that if such second notice is sent more than 20 days following the sending of the first notice or, in the case of a merger approved pursuant to § 251(h) of this title, later than the later of the consummation of the offer contemplated by § 251(h) of this title and 20 days following the sending of the first notice, such second notice need only be sent to each stockholder who is entitled to appraisal rights and who has demanded appraisal of such holder’s shares in accordance with this subsection. An affidavit of the secretary or assistant secretary or of the transfer agent of the corporation that is required to give either notice that such notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. For purposes of determining the stockholders entitled to receive either notice, each constituent corporation may fix, in advance, a record date that shall be not more than 10 days prior to the date the notice is given, provided, that if the notice is given on or after the effective date of the merger or consolidation, the record date shall be such effective date. If no record date is fixed and the notice is given prior to the effective date, the record date shall be the close of business on the day next preceding the day on which the notice is given. |
e) | Within 120 days after the effective date of the merger or consolidation, the surviving or resulting corporation or any stockholder who has complied with subsections (a) and (d) of this section hereof and who is otherwise entitled to appraisal rights, may commence an appraisal proceeding by filing a petition in the Court of Chancery demanding a determination of the value of the stock of all such stockholders. Notwithstanding the foregoing, at any time within 60 days after the effective date of the merger or consolidation, any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party shall have the right to withdraw such stockholder’s demand for appraisal and to accept the terms offered upon the merger or consolidation. Within 120 days after the effective date of the merger or consolidation, any stockholder who has complied with the requirements of subsections (a) and (d) of this section hereof, upon request given in writing (or by electronic transmission directed to an information processing system (if any) expressly designated for that purpose in the notice of appraisal), shall be entitled to receive from the corporation surviving the merger or resulting from the consolidation a statement setting forth the aggregate number of shares not voted in favor of the merger or consolidation (or, in the case of a merger approved pursuant to § 251(h) of this title, the aggregate number of shares (other than any excluded stock (as defined in § 251(h)(6)d. of this title)) that were the subject of, and were not tendered into, and accepted for purchase or exchange in, the offer referred to in § 251(h)(2)), and, in either case, with respect to which demands for appraisal have been received and the aggregate number of holders of such shares. Such statement shall be given to the stockholder within 10 days after such stockholder’s request for such a statement is received by the surviving or resulting corporation or within 10 days after expiration of the period for delivery of demands for appraisal under subsection (d) of this section hereof, whichever is later. Notwithstanding subsection (a) of this section, a person who is the beneficial owner of shares of such stock held either in a voting trust or by a nominee on behalf of such person may, in such person’s own name, file a petition or request from the corporation the statement described in this subsection. |
f) | Upon the filing of any such petition by a stockholder, service of a copy thereof shall be made upon the surviving or resulting corporation, which shall within 20 days after such service file in the office of the Register in Chancery in which the petition was filed a duly verified list containing the names and addresses of all stockholders who have demanded payment for their shares and with whom agreements as to the value of their shares have not been reached by the surviving or resulting corporation. If the petition shall be filed by the surviving or resulting corporation, the petition shall be accompanied by such a duly verified list. The Register in Chancery, if so ordered by the Court, shall give notice of the time and place fixed for the hearing of such petition by registered or certified mail to the surviving or resulting corporation and to the stockholders shown on the list at the addresses therein stated. Such |
notice shall also be given by one or more publications at least one week before the day of the hearing, in a newspaper of general circulation published in the City of Wilmington, Delaware or such publication as the Court deems advisable. The forms of the notices by mail and by publication shall be approved by the Court, and the costs thereof shall be borne by the surviving or resulting corporation. |
g) | At the hearing on such petition, the Court shall determine the stockholders who have complied with this section and who have become entitled to appraisal rights. The Court may require the stockholders who have demanded an appraisal for their shares and who hold stock represented by certificates to submit their certificates of stock to the Register in Chancery for notation thereon of the pendency of the appraisal proceedings; and if any stockholder fails to comply with such direction, the Court may dismiss the proceedings as to such stockholder. If immediately before the merger or consolidation the shares of the class or series of stock of the constituent corporation as to which appraisal rights are available were listed on a national securities exchange, the Court shall dismiss the proceedings as to all holders of such shares who are otherwise entitled to appraisal rights unless (1) the total number of shares entitled to appraisal exceeds 1% of the outstanding shares of the class or series eligible for appraisal, (2) the value of the consideration provided in the merger or consolidation for such total number of shares exceeds $1 million or (3) the merger was approved pursuant to § 253 or § 267 of this title. |
h) | After the Court determines the stockholders entitled to an appraisal, the appraisal proceeding shall be conducted in accordance with the rules of the Court of Chancery, including any rules specifically governing appraisal proceedings. Through such proceeding the Court shall determine the fair value of the shares exclusive of any element of value arising from the accomplishment or expectation of the merger or consolidation, together with interest, if any, to be paid upon the amount determined to be the fair value. In determining such fair value, the Court shall take into account all relevant factors. Unless the Court in its discretion determines otherwise for good cause shown, and except as provided in this subsection, interest from the effective date of the merger through the date of payment of the judgment shall be compounded quarterly and shall accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during the period between the effective date of the merger and the date of payment of the judgment. At any time before the entry of judgment in the proceedings, the surviving corporation may pay to each stockholder entitled to appraisal an amount in cash, in which case interest shall accrue thereafter as provided herein only upon the sum of (1) the difference, if any, between the amount so paid and the fair value of the shares as determined by the Court and (2) interest theretofore accrued, unless paid at that time. Upon application by the surviving or resulting corporation or by any stockholder entitled to participate in the appraisal proceeding, the Court may, in its discretion, proceed to trial upon the appraisal prior to the final determination of the stockholders entitled to an appraisal. Any stockholder whose name appears on the list filed by the surviving or resulting corporation pursuant to subsection (f) of this section and who has submitted such stockholder’s certificates of stock to the Register in Chancery, if such is required, may participate fully in all proceedings until it is finally determined that such stockholder is not entitled to appraisal rights under this section. |
i) | The Court shall direct the payment of the fair value of the shares, together with interest, if any, by the surviving or resulting corporation to the stockholders entitled thereto. Payment shall be so made to each such stockholder, in the case of holders of uncertificated stock forthwith, and the case of holders of shares represented by certificates upon the surrender to the corporation of the certificates representing such stock. The Court’s decree may be enforced as other decrees in the Court of Chancery may be enforced, whether such surviving or resulting corporation be a corporation of this State or of any state. |
j) | The costs of the proceeding may be determined by the Court and taxed upon the parties as the Court deems equitable in the circumstances. Upon application of a stockholder, the Court may order all or a portion of the expenses incurred by any stockholder in connection with the appraisal proceeding, including, without limitation, reasonable attorney’s fees and the fees and expenses of experts, to be charged pro rata against the value of all the shares entitled to an appraisal. |
k) | From and after the effective date of the merger or consolidation, no stockholder who has demanded appraisal rights as provided in subsection (d) of this section shall be entitled to vote such stock for any purpose or to receive payment of dividends or other distributions on the stock (except dividends or other distributions payable to stockholders of record at a date which is prior to the effective date of the merger or consolidation); provided, however, that if no petition for an appraisal shall be filed within the time provided in subsection (e) of this section, or if such stockholder shall deliver to the surviving or resulting corporation a written withdrawal of such stockholder’s demand for an appraisal and an acceptance of the merger or consolidation, either within 60 days after the effective date of the merger or consolidation as provided in subsection (e) of this section or thereafter with the written approval of the corporation, then the right of such stockholder to an appraisal shall cease. Notwithstanding the foregoing, no appraisal proceeding in the Court of Chancery shall be dismissed as to any stockholder without the approval of the Court, and such approval may be conditioned upon such terms as the Court deems just; provided, however that this provision shall not affect the right of any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party to withdraw such stockholder’s demand for appraisal and to accept the terms offered upon the merger or consolidation within 60 days after the effective date of the merger or consolidation, as set forth in subsection (e) of this section. |
l) | The shares of the surviving or resulting corporation to which the shares of such objecting stockholders would have been converted had they assented to the merger or consolidation shall have the status of authorized and unissued shares of the surviving or resulting corporation. |
* | Previously filed. |
# | Indicates management contract or compensatory plan. |
† | Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The undersigned registrant hereby undertakes to provide a copy of any of the omitted schedules upon request by the U.S. Securities and Exchange Commission. |
(a) | The undersigned registrant hereby undertakes to file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended (the “Securities Act”); (ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of a prospectus filed with the U.S. Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and (iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. |
(b) | The undersigned registrant hereby undertakes that, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(c) | The undersigned registrant hereby undertakes to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
(d) | The undersigned registrant hereby undertakes that, for the purpose of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness; provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. |
(e) | The undersigned registrant undertakes that in a primary offering of securities of the registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: (i) any preliminary prospectus or prospectus of the registrant relating to the offering required to be filed pursuant to Rule 424; (ii) any free writing prospectus relating to the offering prepared by or on behalf of the registrant or used or referred to by the registrant; (iii) the portion of any other free writing prospectus relating to the offering containing material information about the registrant or its securities provided by or on behalf of the registrant; and (iv) any other communication that is an offer in the offering made by the registrant to the purchaser. |
(f) | The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by |
reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(g) | The undersigned registrant hereby undertakes as follows: that prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form. |
(h) | The undersigned registrant undertakes that every prospectus: (i) that is filed pursuant to the paragraph immediately preceding; or (ii) that purports to meet the requirements of Section 10(a)(3) of the Securities Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(i) | Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the undersigned registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the U.S. Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. |
(j) | The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. |
(k) | The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective. |
Bioventus Inc. | ||
By: | /s/ Kenneth M. Reali | |
Name: Kenneth M. Reali | ||
Title: Chief Executive Officer and Director |
Signature |
Title |
Date | ||
/s/ Kenneth M. Reali |
Chief Executive Officer and Director | September 22, 2021 | ||
Kenneth M. Reali | (Principal Executive Officer) | |||
/s/ Gregory O. Anglum |
Senior Vice President and Chief Financial Officer | September 22, 2021 | ||
Gregory O. Anglum | (Principal Financial Officer and Principal Accounting Officer) | |||
* |
Chairman | September 22, 2021 | ||
William A. Hawkins III | ||||
* Philip G. Cowdy |
Director | September 22, 2021 | ||
* Guido J. Neels |
Director | September 22, 2021 | ||
* Guy P. Nohra |
Director | September 22, 2021 | ||
* David J. Parker |
Director | September 22, 2021 | ||
* Susan M. Stalnecker |
Director | September 22, 2021 | ||
* Martin P. Sutter |
Director | September 22, 2021 | ||
* |
Director | September 22, 2021 | ||
Mary Kay Ladone |
*By: |
/s/ Kenneth M. Reali | |
Kenneth M. Reali | ||
Attorney-in-fact |
Exhibit 5.1
650 Town Center Drive, 20th Floor | ||||
Costa Mesa, California 92626-1925 | ||||
Tel: +1.714.540.1235 Fax: +1.714.755.8290 | ||||
www.lw.com | ||||
FIRM / AFFILIATE OFFICES | ||||
Beijing | Moscow | |||
Boston | Munich | |||
Brussels | New York | |||
Century City | Orange County | |||
Chicago | Paris | |||
September 22, 2021 | Dubai | Riyadh | ||
Düsseldorf | San Diego | |||
Frankfurt | San Francisco | |||
Hamburg | Seoul | |||
Hong Kong | Shanghai | |||
Houston | Silicon Valley | |||
London | Singapore | |||
Bioventus Inc. | Los Angeles | Tokyo | ||
4721 Emperor Boulevard, Suite 400 | Madrid | Washington, D.C. | ||
Durham, North Carolina 27703 | Milan |
Re: | Registration Statement on Form S-4; Shares of common stock, par value $0.001 per share, of Bioventus Inc. |
Ladies and Gentlemen:
We have acted as counsel to Bioventus Inc., a Delaware corporation (the Company), in connection with the proposed issuance of up to 18,322,984 shares of Class A Common Stock, par value $0.001 per share, of the Company (the Shares), pursuant to the Agreement and Plan of Merger, dated as of July 29, 2021 (the Merger Agreement), by and among the Company, Oyster Merger Sub I, Inc., Oyster Merger Sub II, LLC and Misonix, Inc. (Misonix). The Shares are included in a registration statement on Form S-4 under the Securities Act of 1933, as amended (the Act), filed with the Securities and Exchange Commission (the Commission) on September 8, 2021 (the Registration Statement). This opinion is being furnished in connection with the requirements of Item 601(b)(5) of Regulation S-K under the Act, and no opinion is expressed herein as to any matter pertaining to the contents of the Registration Statement or related Prospectus, other than as expressly stated herein with respect to the issue of the Shares.
As such counsel, we have examined such matters of fact and questions of law as we have considered appropriate for purposes of this letter. With your consent, we have relied upon certificates and other assurances of officers of the Company and others as to factual matters without having independently verified such factual matters. We are opining herein as to General Corporation Law of the State of Delaware (the DGCL), and we express no opinion with respect to any other laws.
September 22, 2021
Page 2
Subject to the foregoing and the other matters set forth herein, it is our opinion that, as of the date hereof, when the Shares shall have been duly registered on the books of the transfer agent and registrar therefor in the name or on behalf of the applicable Misonix stockholders, and have been issued by the Company against payment therefor (not less than par value) in the circumstances contemplated by the Registration Statement and the Merger Agreement, the issue and sale of the Shares will have been duly authorized by all necessary corporate action of the Company, and the Shares will be validly issued, fully paid and nonassessable. In rendering the foregoing opinion, we have assumed that the Company will comply with all applicable notice requirements regarding uncertificated shares provided in the DGCL.
In rendering the foregoing opinion, we have assumed that (i) prior to the delivery of any Shares, the Registration Statement will have been declared effective under the Act and that the registration will apply to all of the Shares and will not have been modified or rescinded and that there will not have occurred any change in law affecting the validity of the issuance of such Shares, and (ii) the Company will comply with all applicable notice requirements regarding uncertificated shares provided in the DGCL.
This opinion is for your benefit in connection with the Registration Statement and may be relied upon by you and by persons entitled to rely upon it pursuant to the applicable provisions of the Act. We consent to your filing this opinion as an exhibit to the Registration Statement and to the reference to our firm in the Prospectus under the heading Legal Matters. We further consent to the incorporation by reference of this letter and consent into any registration statement or post-effective amendment to the Registration Statement filed pursuant to Rule 462(b) with respect to the Shares. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission thereunder.
Very truly yours,
/s/ Latham & Watkins LLP
Exhibit 8.1
51 LOUISIANA AVENUE, N.W WASHINGTON, DC 20001.2113
TELEPHONE: +1.202.879.3939 JONESDAY.COM
September 22, 2021
Misonix Inc.
1938 New Highway
Farmingdale, New York 11735
Ladies and Gentlemen:
We have acted as counsel to Misonix Inc. (Misonix), a Delaware corporation, in connection with the proposed Mergers to be undertaken by Misonix, Bioventus Inc. (Parent), a Delaware corporation, Oyster Merger Sub I, Inc., a Delaware corporation and wholly owned subsidiary of Parent, and Oyster Merger Sub II, LLC, a Delaware limited liability company and wholly owned subsidiary of Parent, pursuant to the Agreement and Plan of Merger dated as of July 29, 2021 (the Merger Agreement), and the preparation and filing with the Securities and Exchange Commission of the registration statement on Form S-4, filed September 22, 2021, related to the Mergers (the Registration Statement). This opinion letter is being delivered in connection with, and appears as an exhibit to, the Registration Statement. Any capitalized terms used but not defined herein have the meaning given to such terms in the Merger Agreement.
In providing our opinion, we have examined and relied on the Merger Agreement, the Registration Statement, the statements and representations made by Parent and Misonix in their respective officers certificates dated as of the date hereof and delivered to us for purposes of this opinion (the Officers Certificates), and such other documents as we have deemed necessary or appropriate for purposes of this opinion. In addition, we have assumed that (i) the Mergers and related transactions will be consummated in accordance with the provisions of the Merger Agreement and as described in the Registration Statement (and no transaction or condition described therein will be waived by any party), (ii) the statements concerning the Mergers and related transactions and the parties thereto set forth in the Merger Agreement and in the Registration Statement are true, complete and correct and will remain true, complete and correct at all times up to and including, and thereafter where relevant, the effective time of each transaction contemplated by the Merger Agreement, (iii) the statements and representations made in the Officers Certificates are true, complete and correct and will remain true, complete and correct at all times up to and including, and thereafter where relevant, the effective time of each transaction contemplated by the Merger Agreement, (iv) any such statement or representation set forth in the Merger Agreement, the Registration Statement or the Officers Certificates that is qualified by belief, knowledge, intention, materiality or any comparable or similar qualification, is and will be true, complete and correct as if made without such qualification, (v) all documents submitted to us as originals are authentic, all documents submitted to us as copies conform to the originals, all relevant documents have been or will be duly executed in the form presented to us and all natural persons who have executed such documents are of legal capacity, (vi) the parties to the Merger Agreement and their respective subsidiaries will treat the transactions for U.S. federal income tax purposes in a manner consistent with this opinion, (vii) such parties have
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complied with and will continue to comply with the obligations, covenants and agreements contained in the Merger Agreement, (viii) all applicable reporting requirements have been or will be satisfied and (ix) there will be no change in applicable U.S. federal income tax law from the date hereof through the effective time of each transaction contemplated by the Merger Agreement. If any of the above described assumptions is untrue for any reason or if the transaction is consummated in a manner that is different from the manner described in the Merger Agreement, the Registration Statement, or the Officers Certificates, this opinion may be adversely affected. We have not undertaken any independent investigation of any factual matter set forth in any of the foregoing.
Based upon and subject to the foregoing and our consideration of such other matters of fact and law as we have considered necessary or appropriate, we hereby confirm that, subject to the assumptions, exceptions, limitations and qualifications set forth herein and in the Registration Statement, the discussion set forth in the Registration Statement under the caption MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE FIRST MERGER AND THE SECOND MERGERU.S. HOLDERS U.S. Federal Income Tax Consequences of the First Merger and the Second Merger to U.S. Holders of Shares of Misonix Common Stock insofar as such discussion contains statements of U.S. federal income tax law, constitutes our opinion as to the material U.S. federal income tax consequences of the Mergers to U.S. holders (as defined in the Registration Statement).
We express no opinion on any issue relating to the tax consequences of any transactions contemplated by the Merger Agreement or the Registration Statement other than the opinion set forth above. Our opinion set forth above is based on the Code, Treasury Regulations promulgated thereunder, published pronouncements of the Internal Revenue Service and judicial precedents, all as of the date hereof. The foregoing authorities may be repealed, revoked or modified, and any such change may have retroactive effect. Any change in applicable laws or facts and circumstances surrounding the Mergers, or any inaccuracy in the statements, facts, assumptions and representations on which we have relied may affect the validity of the opinion set forth herein. We assume no responsibility to inform Misonix of any such change or inaccuracy that may occur or come to our attention. In addition, our opinion is being delivered prior to the consummation of the Mergers and therefore is prospective and dependent on future events.
This opinion is furnished to you solely in connection with the Registration Statement and this opinion is not to be relied upon for any other purpose. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement, and to the references therein to us. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations thereunder.
Very truly yours, |
/s/ Jones Day |
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We have issued our report dated March 26, 2021, with respect to the financial statement of Bioventus Inc. contained in the Registration Statement and Joint Proxy Statement/Prospectus. We consent to the use of the aforementioned report in this Registration Statement and Joint Proxy Statement/Prospectus, and to the use of our name as it appears under the caption Experts.
/s/ GRANT THORNTON LLP
Raleigh, North Carolina
September 22, 2021
Exhibit 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We have issued our report dated March 26, 2021, with respect to the consolidated financial statements of Bioventus LLC contained in the Registration Statement and Joint Proxy Statement/Prospectus. We consent to the use of the aforementioned report in this Registration Statement and Joint Proxy Statement/Prospectus, and to the use of our name as it appears under the caption Experts.
/s/ GRANT THORNTON LLP
Raleigh, North Carolina
September 22, 2021
Exhibit 23.3
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the use in this Registration Statement on Form S-4 of Bioventus Inc. of our report dated August 16, 2019, except for the effects of disclosing net loss per unit information discussed in Note 13 and the effects of discontinued operations discussed in Note 16 to the consolidated financial statements, as to which the date is October 6, 2020, relating to the financial statements of Bioventus LLC, which appears in this Registration Statement. We also consent to the reference to us under the heading Experts in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
Raleigh, North Carolina
September 22, 2021
Exhibit 23.4
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in this Registration Statement on Form S-4 of our report dated September 2, 2021, relating to the financial statements of Misonix, Inc, appearing in the Annual Report on Form 10-K of Misonix, Inc. for the year ended June 30, 2021. We also consent to the reference to us under the heading Experts in such Registration Statement.
/s/ Deloitte & Touche LLP
Jericho, New York
September 22, 2021
Exhibit 99.1
Consent of Perella Weinberg Partners LP
We hereby consent to the use in Amendment No. 1 to the Registration Statement of Bioventus Inc. on Form S-4 and in the Joint Proxy Statement/Prospectus of Bioventus Inc. and Misonix, Inc., which is part of the Registration Statement, filed on September 8, 2021 (the Registration Statement), of our opinion dated July 29, 2021 appearing as Annex B to such Joint Proxy Statement/Prospectus, and to the description of such opinion and to the references to our name contained therein under the heading SummaryOpinion of Bioventuss Financial Advisor, Risk FactorsRisks Related to the Mergers, The MergerBackground of the Merger, The Merger Recommendation of the Bioventus Board of Directors; Bioventuss Reasons for the Merger, The MergerOpinion of Bioventuss Financial Advisor and The MergerCertain Unaudited Prospective Financial Information. In giving the foregoing consent, we do not admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended (the Securities Act), or the rules and regulations promulgated thereunder, nor do we admit that we are experts with respect to any part of such Registration Statement within the meaning of the term experts as used in the Securities Act or the rules and regulations promulgated thereunder. Additionally, such consent does not cover any future amendments to the Registration Statement.
By: /s/ Perella Weinberg Partners LP
New York, New York
September 22, 2021
Exhibit 99.2
CONSENT OF J.P. MORGAN SECURITIES LLC
We hereby consent to (i) the inclusion of our opinion letter dated July 29, 2021 to the Board of Directors of Misonix, Inc. (the Company) included in Annex C to the Joint Proxy Statement/Prospectus relating to the proposed merger of the Company and Bioventus Inc., and (ii) the references to such opinion in such Joint Proxy Statement/Prospectus. In giving such consent, we do not admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the Securities and Exchange Commission thereunder, nor do we hereby admit that we are experts with respect to any part of such Registration Statement within the meaning of the term experts as used in the Securities Act of 1933, as amended, or the rules and regulations of the Securities and Exchange Commission thereunder.
Very truly yours, |
/S/ J.P. MORGAN SECURITIES LLC |
September 22, 2021