Item 1.01 Entry into a Material Definitive Agreement.
As previously disclosed, on September 5, 2022, Clarus Therapeutics Holdings,
Inc., or Clarus, and its wholly-owned subsidiary Clarus Therapeutics, Inc., or
OpCo, filed voluntary petitions for bankruptcy protection under Chapter 11 of
Title 11 of the United States Bankruptcy Code. The filing was made in the United
States Bankruptcy Court for the District of Delaware, or the Court (Case No.
22-10845).
As then on October 14, 2022, Clarus and OpCo concluded the auction held as a
part of Clarus and OpCo's Court-supervised sale process, with Tolmar, Inc.
deemed the successful bidder.
On October 25, 2022, Clarus and OpCo entered into an asset purchase agreement
with Tolmar and Tolmar Holdings, Inc., collectively Tolmar, pursuant to which
Tolmar agreed to acquire the rights and certain related assets of Clarus and
OpCo to develop, manufacture, package, promote, market, sell, distribute and
otherwise commercialize JATENZO® and assume certain liabilities of Clarus and
OpCo for a purchase price consisting of $7.25 million upfront, and contingent
consideration payable for a three-year period consisting of (i) royalties in the
amount of 6% of net sales of JATENZO® within the United States for net sales of
up to $20 million and 10% for net sales of JATENZO® within the United States for
net sales greater than $20 million, with a minimum royalty payment of $500,000
for each year of the three-year term and (ii) one-time milestone payments of $3
million, $5 million or $7 million if net sales of JATENZO® exceed $30 million,
$50 million or $70 million, respectively in any year of the three-year term.
Tolmar also agreed to use commercially reasonable efforts with respect to
commercialization following closing and until the end of the three-year term.
The asset purchase agreement contains customary representations and warranties
and covenants of the parties, indemnification provisions and is subject to a
number of customary closing conditions, including, without limitation: the
accuracy of representations and warranties; performance of covenants and the
entry of a final sale order by the Court. Either Clarus or Tolmar may terminate
the asset purchase agreement by mutual consent or if the closing conditions have
not been satisfied or waived by the end of October 27, 2022 and upon certain
other events.
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 attached as Exhibit 2.1 hereto and incorporated
herein by reference.
Item 2.01 Completion of Acquisition or Disposition of Assets.
On October 27, 2022, Clarus and OpCo completed the sale of assets and
liabilities to Tolmar pursuant to the asset purchase agreement described in Item
1.01 of this current report on Form 8-K following an October 26, 2022 order of
the Court approving the transactions contemplated by the asset purchase
agreement.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
As a result of the closing the asset sale to Tolmar pursuant to the asset
purchase agreement described in Item 1.01 of this current report Form 8-K, on
October 28, 2022, John Amory, Elizabeth Cermak, Kimberly Murphy, Mark Prygocki
and Alex Zisson notified Clarus of their intent to resign as members of Clarus'
board of directors effective October 31, 2022. Their resignations are not due to
any disagreements with Clarus on any matters relating to its operations,
policies and practices. Robert Dudley will remain as the sole member of the
Clarus board of directors.
Additionally, on October 28, 2022, the Clarus board determined to terminate the
employment of Robert Dudley, Clarus' Chief Executive Officer, effective October
31, 2022, and of Steven Bourne, Clarus' Chief Administrative Officer and Chief
Financial Officer and Frank A. Jaeger, Clarus' Chief Commercial Officer, each
effective November 14, 2022 (e.g., 10 business days after October 31, 2022).
Lawrence R. Perkins of SierraConstellation Partners LLC will continue to act as
Chief Restructuring Officer of Clarus.
Item 8.01 Other Events.
Cautionary Statements Regarding Trading in Clarus' Securities
Clarus' securityholders are cautioned that trading in Clarus' securities during
the pendency of the Chapter 11 case is highly speculative and poses substantial
risks. Trading prices for Clarus' securities may bear little or no relationship
to the actual recovery, if any, by holders thereof in Clarus' Chapter 11 case.
Accordingly, Clarus urges extreme caution with respect to existing and future
investments in its securities.
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Cautionary Note Regarding Forward-Looking Statements
This current report on Form 8-K contains "forward-looking statements" for
purposes of the federal securities laws. The words "anticipate," "believe,"
"contemplate," "continue," "could," "estimate," "expect," "intends," "may,"
"might," "plan," "possible," "potential," "predict," "project," "should,"
"will," "would" and similar expressions may identify forward-looking statements,
but the absence of these words does not mean that a statement is not
forward-looking. Clarus' forward-looking statements in this current report on
Form 8-K include, but are not limited to, express or implied statements about
Clarus' Chapter 11 case under the U.S. Bankruptcy Code and Clarus' belief that
the sale process will be in the best interest of Clarus and its stakeholders,
among others. These forward-looking statements are based on current expectations
and beliefs concerning future developments and their potential effects. There
can be no assurance that future developments affecting Clarus will be those
anticipated. These forward-looking statements involve a number of risks,
uncertainties (some of which are beyond Clarus' control) or other assumptions
that may cause actual results or performance to be materially different from
those expressed or implied by these forward-looking statements. These risks and
uncertainties include, but are not limited to risks associated with the
potential adverse impact of the Chapter 11 filings on Clarus' liquidity and
results of operations; changes in Clarus' ability to meet its financial
obligations during the Chapter 11 process and to maintain contracts that are
critical to its operations; the outcome and timing of the Chapter 11 process;
the effect of the Chapter 11 filings and asset sale on Clarus' relationships
with vendors, regulatory authorities, employees and other third parties;
possible proceedings that may be brought by third parties in connection with the
Chapter 11 process or the asset sale; and the timing or amount of any
distributions, if any, to Clarus' stakeholders, as well as risks associated with
pharmaceutical development and being a pharmaceutical company generally, along
with those factors described under the heading "Risk Factors" in Clarus' annual
report on 10-K for the year ended December 31, 2021, filed with the Securities
and Exchange Commission, or the SEC, on March 31, 2022, and those that are
included in any of Clarus' future filings with the SEC. Some of these risks and
uncertainties may in the future be amplified by the ongoing COVID-19 pandemic
and there may be additional risks that Clarus considers immaterial, or which are
unknown. It is not possible to predict or identify all such risks. Clarus'
forward-looking statements only speak as of the date they are made, and Clarus
does not undertake any obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise,
except as may be required under applicable securities laws..
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description
2.1¥ Asset Purchase Agreement, dated as of October 25, 2022, by and between
Clarus Therapeutics Holdings, Inc., Clarus Therapeutics, Inc., Tolmar,
Inc. and Tolmar Holdings, Inc.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
¥ Schedules and exhibits have been omitted from this exhibit pursuant to Item
601(b)(2) of Regulation S-K and are not filed herewith. The registrant hereby
agrees to furnish a copy of any omitted schedule or exhibits to the U.S.
Securities and Exchange Commission upon request.
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