Item 8.01 Other Events.
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).
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., or Tolmar,
deemed the successful bidder.
The winning bid, which remains subject to definitive documentation and Court
approval, includes cash consideration 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) annual
milestone payments of $3 million, $5 million or $7 million if net sales of
Jatenzo exceed $30 million, $50 million or $70 million, respectively. Tolmar's
winning bid also committed to making reasonable efforts at commercialization
within 30 days following closing of the asset sale, with 75 people dedicated to,
committed to, or assigned to the marketing and sales of Jatenzo, and an outside
closing date of October 27, 2022. There can be no assurance that Clarus and OpCo
will enter into a definitive asset purchase agreement with Tolmar, that such
asset purchase agreement will be approved by the Court at the hearing scheduled
for October 26, 2022, or that Clarus and OpCo will consummate the sale pursuant
to any such asset purchase agreement.
On October 18, 2022, Clarus issued a press release announcing the results of the
bankruptcy auction. A copy of the press release is attached hereto as Exhibit
99.1 and is incorporated herein by reference.
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 will pose
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.
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' plans to sell all of its assets pursuant to Chapter 11 of the U.S.
Bankruptcy Code; the terms of the winning bid in Clarus' bankruptcy auction and
Clarus' ability to enter into a definitive asset purchase agreement, Court
approval thereof, and Clarus' ability to consummate the sale and timing thereof,
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 negotiating
a definitive asset purchase agreement, risks associated with Court approval of
the terms and ability to meet the closing conditions, along with the 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 and the proposed asset sale; the effect of the Chapter 11
filings and proposed 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 proposed 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
99.1 Press Release of Clarus Therapeutics Holdings, Inc., dated October 18,
2022.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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