Item 1.01 Entry into a Material Definitive Agreement.
Agreement and Plan of Merger
On
Subject to the terms and conditions of the Merger Agreement, at the closing of the Merger, each outstanding share of ReShape common stock and series B convertible preferred stock will be converted into the right to receive shares of common stock of Obalon ("Obalon Shares") based on the exchange ratio set forth in the Merger Agreement. Upon completion of the Merger, ReShape stockholders will own approximately 51% of the combined company's outstanding common stock and Obalon stockholders will own approximately 49%, subject to the terms of the Merger Agreement. Obalon will, at the effective time of the Merger, assume the outstanding warrants and series C convertible preferred stock of ReShape, subject to the terms of the Merger Agreement. All outstanding stock options of ReShape will be cancelled and terminated at the effective time of the Merger without any right to receive any consideration. No fractional shares will be issued in connection with the Merger and Obalon will pay cash in lieu of any such fractional shares. The Merger is intended to qualify for federal income tax purposes as a tax-free reorganization under the provisions of Section 368(a) of the Internal Revenue Code of 1986, as amended.
Consummation of the Merger is subject to certain closing conditions, including,
among other things, approval by the stockholders of ReShape and Obalon and the
At the effective time of the Merger, the Board of Directors of the combined company is expected to consist of the five current members of the Board of Directors of ReShape and the executive officers of the combined company will be the current executive officers of ReShape.
In addition, under the terms of the Merger Agreement, Obalon has agreed to file
with NASDAQ a Listing of Additional Shares Notice covering the Obalon shares to
be issued in connection with the Merger on the
The Merger Agreement contains customary representations, warranties and covenants by ReShape and Obalon. ReShape and Obalon have agreed, among other things, subject to certain exceptions, not to (1) directly or indirectly initiate, seek, or solicit, or knowingly encourage or facilitate any offer or alternative proposal for specified alternative transactions, or (2) participate or engage in discussions or negotiations regarding such an offer or proposal with, or furnish any nonpublic information regarding such an offer or proposal to, any person that has made or, to ReShape's or Obalon's knowledge, is considering making such an offer or proposal, (3) terminate, amend, modify, or waive any standstill or similar obligation (subject to certain conditions), or (4) enter into any agreement with respect to an alternative proposal. In addition, certain covenants require each of the parties to use, subject to the terms and conditions of the Merger Agreement, their commercially reasonable efforts to cause the Merger to be consummated as promptly as practicable. Subject to certain exceptions, the Merger Agreement also requires each of ReShape and Obalon to call and hold stockholders' meetings and requires the board of directors of each of ReShape and Obalon to recommend approval of the Merger.
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The summary of the terms of the Merger Agreement is intended to provide
information about the terms of the Merger. The terms and information in the
Merger Agreement should not be relied on as disclosures about ReShape or Obalon
without consideration of the entirety of public disclosure by ReShape and Obalon
as set forth in all of their respective public reports with the
The foregoing summary of the Merger Agreement is subject to, and qualified in its entirety by, the full text of the Merger Agreement, a copy of which is attached hereto as Exhibit 2.1 and is incorporated by reference herein.
Voting and Support Agreements
On
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information disclosed under the headings "Credit Facility Agreement" and "Amendment to Credit Agreement" in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
Item 3.02 Unregistered Sales of
The information disclosed under the heading "Amendment to Credit Agreement" in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02.
Important Additional Information and Where to Find It
In connection with the proposed merger, Obalon plans to file with the
Participants in the Solicitation
ReShape, Obalon, their respective directors, executive officers and employees
may be deemed to be participants in the solicitation of proxies from ReShape's
and Obalon's stockholders in connection with the proposed transaction.
Information about the directors and executive officers of ReShape is set forth
in ReShape's annual report on Form 10-K for the fiscal year ended
Forward-Looking Statements
Certain statements either contained in or incorporated by reference into this
document, other than purely historical information, including estimates,
projections and statements relating to ReShape's business plans, objectives and
expected operating results, and the assumptions upon which those statements are
based, are "forward-looking statements." All statements, other than statements
of historical facts, included in or incorporated by reference into this document
regarding strategy, future operations, future financial position, future
revenue, projected expenses, prospects, plans and objectives of management are
forward-looking statements. Examples of such statements include, but are not
limited to, statements relating to the structure, timing and completion of the
proposed merger; the combined company's listing on the
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merger through the process being conducted by ReShape and Obalon. ReShape and Obalon each disclaims any intent or obligation to update these forward-looking statements to reflect events or circumstances that exist after the date on which they were made.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. Exhibit No. Description 2.1 Agreement and Plan of Merger, dated as ofJanuary 19, 2021 , by and among Obalon Therapeutics, Inc.,Optimus Merger Sub, Inc. , andReShape Lifesciences Inc. * 10.1 Form of Voting and Support Agreement by and amongReShape Lifesciences Inc. and certain stockholders of Obalon Therapeutics, Inc. 10.2 Credit Facility Agreement, dated as ofJanuary 19, 2021 , by and betweenReShape Lifesciences Inc. andArmistice Capital Master Fund Ltd. 10.3 Fourth Amendment to Credit Agreement, datedJanuary 19, 2021 , by and betweenReShape Lifesciences Inc. andArmistice Capital Master Fund Ltd.
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* The schedules to the Agreement and Plan of Merger have been omitted from
this filing pursuant to Item 601(b)(2) of Regulation S-K. ReShape will furnish
copies of any such schedules to the
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