NanoString Technologies (NSTG) Enters $220M Asset Purchase Agreement

As previously disclosed, on February 4, 2024, NanoString Technologies (OTC: NSTGQ) and certain of its subsidiaries (together with the Company, the “Debtors”) filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (such court, the “Court” and such cases, the “Cases”).
On March 10, 2024, the Company entered into an asset purchase agreement (the “Asset Purchase Agreement”) with an affiliate of Patient Square Capital (“Patient Square”) to sell substantially all of the assets of the Company and its subsidiaries (the “Business”) for a cash purchase price of $220,000,000 (the “Purchase Price”) along with Patient Square’s assumption of certain liabilities of the Business (including liabilities related to all outstanding intellectual property litigation). Pursuant to the Asset Purchase Agreement, the Company will be responsible for the payment of the Cure Costs (as defined in the Asset Purchase Agreement) in respect of the assigned contracts that are part of the Business. The transaction is part of a sale process under Section 363 of the Bankruptcy Code that will be subject to approval by the Court and compliance with agreed upon and Court-approved bidding procedures allowing for the submission of higher or otherwise better offers, and other agreed-upon conditions. In accordance with the sale process under Section 363 of the Bankruptcy Code, notice of the proposed sale to Patient Square will be given to third parties and competing bids will be solicited. The Company will manage the bidding process and evaluate the bids, in consultation with its advisors and as overseen by the Court.
Pursuant to the terms of the Asset Purchase Agreement, Patient Square and the Company entered into an escrow agreement with Citibank, N.A. (the “Escrow Agent”), pursuant to which Patient Square deposited into escrow with the Escrow Agent $22,000,000 (such amount, the “Deposit”) against the Purchase Price.
The Asset Purchase Agreement contains customary representations and warranties of the parties and is subject to a number of closing conditions, including, among others, (i) the accuracy of representations and warranties of the parties; (ii) the entry of an order approving the Asset Purchase Agreement and the transactions therein by the Court; (iii) compliance in all material respects with the obligations of the parties set forth in the Asset Purchase Agreement; and (iv) no Material Adverse Effect (as defined in the Asset Purchase Agreement) having occurred.
The Asset Purchase Agreement may be terminated, subject to certain exceptions: (i) by the mutual written consent of the parties; (ii) by either party, (a) for certain material breaches by the other party of the Bidding Procedures Order, the Sale Order or of its representations and warranties or covenants in the Asset Purchase Agreement that remain uncured, (b) if the closing has not occurred by June 30, 2024 or (c) if the Company enters into an Alternative Transaction (as defined in the Asset Purchase Agreement) with one or more persons other than Patient Square; or (iii) by Patient Square if (a) the Court has not entered the Bidding Procedures Order by 11:59 p.m. (prevailing Eastern Time) on April 1, 2024, (b) the Court has not approved and entered the Sale Order prior to 11:59 p.m. (prevailing Eastern Time) on May 1, 2024, (c) following entry of the Sale Order or the Bidding Procedures Order, such order is stayed, reversed, modified, vacated or amended in any material respect without the prior written consent of Patient Square, and such stay, reversal, modification, vacation or amendment is not eliminated within fourteen (14) days, (d) the Bankruptcy Court enters any order materially inconsistent with the Bidding Procedures Order, the Sale Order or the consummation of the Asset Purchase Agreement and such order is not reversed, modified or amended to the satisfaction of Patient Square within fourteen (14) days, (e) the Court enters an order of dismissal of the Cases, conversion of the Cases into cases under chapter 7 of the Bankruptcy Code, or appointment of a trustee or receiver is entered for any reason, (f) the Company files any stand alone plan of reorganization or liquidation (or announces support of any such plan filed by any other party), (g) if a governmental authority of competent jurisdiction issues a final and non-appealable order having the effect of permanently making the consummation of the transactions contemplated by the Asset Purchase Agreement illegal or (h) if any creditor of the Debtors obtains a final and unstayed order from the Court granting relief from the automatic stay.
The Asset Purchase Agreement provides that the Company will pay a break-up fee to Patient Square equal to $6,600,000 upon termination of the Asset Purchase Agreement in certain circumstances, including in connection with the entry into of an “alternative transaction” (as defined in the Asset Purchase Agreement) with a party other than Patient Square and in case of a material breach by the Company of the Asset Purchase Agreement, the Bidding Procedures Order or the Sale Order that remains uncured. The Asset Purchase Agreement also provides for the reimbursement of Patient Square’s expenses incurred in connection with the Asset Purchase Agreement up to an aggregate amount of $3,300,000 payable under certain circumstances upon a termination of the Asset Purchase Agreement.
The foregoing description of the Asset Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the Asset Purchase Agreement, a copy of which is filed as Exhibit 10.1 hereto and incorporated by reference herein. The representations and warranties contained in the Asset Purchase Agreement were made only for the purposes of the Asset Purchase Agreement and solely for the benefit of the parties thereto. Those representations and warranties
may be subject to important limitations and qualifications agreed to by the contracting parties. Some of those representations and warranties may not be accurate or complete as of any particular date because they are subject to contractual standards of materiality different from that generally applicable to public disclosures to stockholders. Furthermore, the representations and warranties may have been made for the purposes of allocating contractual risk between the parties to such contract or other document instead of establishing these matters as facts, and they may or may not have been accurate as of any specific date and do not purport to be accurate as of the date of this Form 8-K. Accordingly, you should not rely upon the representations and warranties in the Asset Purchase Agreement as statements of factual information.

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