Item 1.01
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Entry into a Material Definitive Agreement.
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On September 27, 2022, Isoray, Inc. (the “Company” or “Isoray”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, Isoray Acquisition Corp., a Delaware corporation and wholly-owned subsidiary of the Company (“Merger Sub”), Viewpoint Molecular Targeting, Inc., a Delaware corporation (the “Target Company” or “Viewpoint”), and Cameron Gray, as the representative of the Owners (as defined therein). Viewpoint is an alpha-particle radiopharmaceutical company in the alphaemitter market developing oncology therapeutics and complementary imaging agents.
The Merger Agreement provides that, subject to the terms and conditions set forth therein, Merger Sub will merge with and into Viewpoint, with Viewpoint continuing as the surviving corporation as a wholly-owned subsidiary of Isoray (such transaction, the “Merger”). Under the Merger Agreement, at the effective time of the Merger, each issued and outstanding share of common stock of Viewpoint will be converted into the right to receive (i) 3.3212 (the “Exchange Ratio”) shares of Isoray common stock, rounded to the nearest whole share (the Exchange Shares”), (ii) any cash in lieu of fractional shares of Isoray common stock payable pursuant to the Merger Agreement, and (iii) any dividends or other distributions to which the holder thereof becomes entitled to upon the surrender of such shares of Viewpoint common stock. Other than as set forth in (ii) in the preceding sentence, there will be no cash consideration paid in connection with the Merger. Following completion of the Merger, the stockholders of Viewpoint immediately prior to the closing of the Merger (the “Closing”) will own 49% of the fully-diluted outstanding capital stock of the Company.
Upon the Closing, Isoray will increase the size of its Board of Directors from four members to not less than five members. Three of the directors will be designated by Isoray and two of the directors will be designated by Viewpoint. Lori Woods, our current CEO and a director, will be one of the directors appointed by Isoray and will serve as the chairperson. Thijs Spoor, Viewpoint’s current CEO, will be one of the directors appointed by Viewpoint. The remaining directors, if any, will be mutually agreed upon by Lori Woods and Thijs Spoor. Also upon the Closing, Lori Woods will resign from her position as CEO of Isoray and Thijs Spoor will be named CEO of Isoray. Jonathan Hunt will continue as Isoray’s Chief Financial Officer.
Each of the parties to the Merger Agreement has provided customary representations, warranties, and covenants in the Merger Agreement. The completion of the Merger is subject to various closing conditions, including (i) performance in all respects by each party of its covenants and agreements, (ii) Isoray and Viewpoint each obtaining approval by its stockholders of the Merger and related matters, (iii) the receipt by Isoray of a fairness opinion to the effect that, subject to the qualifications and assumptions set forth therein, the Exchange Ratio is fair, from a financial point of view, to the Company, (iv) the Exchange Shares shall have been approved for listing on NYSE American, (v) any necessary consents or approvals by governmental and regulatory authorities and non-governmental third-parties being obtained, and (vi) there being no event, change, or occurrence which individually or together with any other event could reasonably be expected to have a material adverse effect on either Isoray or Viewpont.
The Merger Agreement contains certain termination rights for both Isoray and Viewpoint, including that either Isoray or Viewpoint may terminate the Merger Agreement if the Closing does not occur on or before January 31, 2023.
The Merger Agreement contains certain restrictions on the conduct of the Company’s and Viewpoint’s respective businesses between the date of signing the Merger Agreement and the earlier of the Closing or the termination of the Merger Agreement. During such period, Isoray and Viewpoint each must conduct its business in the ordinary course and consistent with past practices in all material respects and may not enter into any material transactions without the other party’s consent.
The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by the Merger Agreement, a copy of which is attached hereto as Exhibit 2.1 and is incorporated herein by reference.
Certificate of Amendment and Changes to Amended and Restated 2020 Equity Incentive Plan
In connection with the Merger, the Company will approve, subject to stockholder approval, (i) an amendment to its Certificate of Incorporation to increase the total number of shares of common stock the Company is authorized to issue to 400,000,000 shares, and (ii) an amendment to the Company’s Amended and Restated 2020 Equity Incentive Plan (the “Incentive Plan”) to increase the amount of shares of common stock available for awards thereunder to 46,000,000. The amendment to the Incentive Plan is conditioned on the Closing, and if the Closing does not occur, the Incentive Plan will not be amended regardless of the approval of such amendment by the stockholders of the Company.
Registration Rights and Lock-Up Agreement
Also in connection with the Merger Agreement, the Company will enter into a Registration Rights and Lock-Up Agreement, by and among the Company and the stockholders of Viewpoint (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement (i) the Company will agree to file a resale registration statement for the Registrable Securities (as defined in the Registration Rights Agreement) no later than 30 days following the Closing, and to use commercially reasonable efforts to cause it to become effective as promptly as practicable following such filing, (ii) the stockholders will be granted certain piggyback registration rights with respect to registration statements filed subsequent to the Closing, and (iii) the Lock-Up Holders (as defined in the Registration Rights Agreement) will agree, subject to certain customary exceptions, not to sell, transfer or dispose of any Company common stock until the earlier of (a) six months, or (b) the date on which the Company completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities, or other property.