Sec Form 13D Filing - CMLS Holdings II LLC filing for SomaLogic Inc. (SLGC) - 2022-12-14

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No person other than the Reporting Persons is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Common Stock beneficially owned by the Reporting Persons. 

The information set forth in Item 4 above is hereby incorporated by reference into this Item 6.

Long Swaps

On December 12, 2022, contemporaneously with the sale of 2,460,000 shares of Common Stock described in Item 4 above, investment funds advised by Corvex Management LP (the “Corvex Funds”), the general partner of which is controlled by Mr. Meister, entered into cash-settled swaps (the “Long Swaps”) with an unaffiliated third party financial institution or affiliate of the purchaser of the shares of Common Stock described in Item 4 above that represent the economic long-side exposure to a basket of securities which includes a notional interest in 2,460,000 shares of Common Stock (the “Notional Securities”), representing economic exposure to 1.3% of the outstanding shares, with a reference price of $2.55 per share (the “Reference Price”). Under the terms of the Long Swaps (i) the counterparty will be obligated to pay in cash to the Corvex Funds any positive price performance in the Notional Securities from the Reference Price with respect to the Notional Securities as of the termination of the Long Swaps and (ii) the Corvex Funds will be obligated to pay in cash to the counterparty any negative price performance in the Notional Securities from the Reference Price as of the termination of the Long Swaps, in each case as part of the overall cash payment to be made under the Long Swaps taking into account the other securities reflected in the basket. All balances will be exclusively cash settled at the termination of the Long Swaps. The Long Swaps have a maximum term of three years.

The Long Swaps do not give the Reporting Persons or the Corvex Funds direct or indirect voting, investment, or dispositive control over any securities of the Issuer, do not provide for the Reporting Persons or Corvex Funds to have any power to acquire any shares of Common Stock from the counterparty, and do not require the counterparty to acquire, hold, vote or dispose of any securities of the Issuer. Accordingly, the Reporting Persons hereby expressly disclaim beneficial ownership of the Notional Securities and any other securities that may be referenced in the Long Swaps or other securities or financial instruments that may be held from time to time by the counterparty.

Outstanding Equity Awards held by Mr. Casdin

In connection with Mr. Casdin’s service on the board of directors of the Issuer, Mr. Casdin has been awarded various equity grants. Mr. Casdin currently holds (i) 3,757 unvested restricted stock units granted on September 1, 2021, which vest if at any time between the 13-month anniversary of the consummation of the Issuer’s business combination with CM Life Sciences II Inc. (the “Business Combination”), which closed on September 1, 2021, and the 24-month anniversary of the consummation of the Business Combination, or in connection with a subsequent change in control, the closing price of the Common Stock is greater than or equal to $20.00 for a period of at least 20 out of 30 consecutive trading days, subject to continued service through such dates, (ii) 41,905 unvested options granted on February 19, 2021, which shall vest as to 25% of the shares one year after the grant date, with the remaining shares to vest in equal monthly installments thereafter starting on the 1st day of the following full month until fully vested (20,955 of which have vested or will vest within 60 days of the date of this Amendment and are reported in Section (a) of Item 5), (iii) 46,705 unvested options granted on October 27, 2021, which shall vest as to 25% of the shares one year after the grant date, with the remaining shares to vest in equal monthly installments thereafter starting on the 1st day of the following full month until fully vested (15,568 of which have vested or will vest within 60 days of the date of this Amendment and are reported in Section (a) of Item 5), (iv) 20,600 unvested options which vest in full one year after the grant date on March 1, 2022, and (v) 3,430 unvested restricted stock units granted on March 1, 2022.

Palamedrix Acquisition

On July 25, 2022, the Issuer entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among the Issuer, Palamedrix, Inc. (“Palamedrix”), and the other parties thereto, pursuant to which, on August 31, 2022, the Issuer acquired Palamedrix (the “Palamedrix Acquisition”). Pursuant to the Merger Agreement, and subject to the terms and conditions thereof, the Issuer paid Palamedrix’s securityholders upfront consideration in an aggregate amount of approximately $14.0 million payable in cash, subject to customary purchase price adjustments, and $21.0 million payable in shares of Common Stock (the “Upfront Shares”). The Upfront Shares were (i) valued using the volume-weighted average price of the Common Stock over the five (5) consecutive trading day period beginning on the trading day that is six (6) trading days immediately preceding the date of the Merger Agreement and ending on and including the trading day that is immediately preceding the date of the Merger Agreement and, (ii) with respect to certain Palamedrix securityholders, subject to vesting over the three years following the consummation of the Merger. In addition, certain Palamedrix Securityholders were eligible to receive up to an additional $17.5 million in milestone payments upon the achievement of certain pre-specified revenue milestones, payable through a mixture of cash and Common Stock. The shares of Common Stock payable as milestone consideration (the “Milestone Shares”) will be valued using the volume-weighted average price of the Common Stock over the five (5) consecutive trading day period beginning on the trading day that is six (6) trading days immediately preceding the date that the applicable milestone is achieved and ending on and including the trading day that is immediately prior to the date that the applicable milestone is achieved.

At the closing of the transactions contemplated by the Merger Agreement, Casdin Partners Master Fund, L.P., a former securityholder of Palamedrix, received $0.8 million in cash, 215,193 Upfront Shares, and the right to receive 94,757 Milestone Shares.

The foregoing description of the Palamedrix Acquisition and the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of such agreement, which is attached as an exhibit to this Amendment and is incorporated herein by reference.

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

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