Business Context and Reporting Period
Company: Relay Therapeutics, Inc. (RLAY)
Filing Type: Form 8-K (Current Report)
Date of Report: April 15, 2021
Event: Entry into a Definitive Material Agreement (Merger Agreement) to acquire ZebiAI Therapeutics, Inc.
Key Financial Metrics and Transaction Terms
This filing details a strategic acquisition rather than periodic financial results. Key transaction values include:
- Total Upfront Consideration: Approximately $85.0 million.
- Cash Component: Approximately $20.0 million.
- Stock Component: Approximately $65.0 million in Relay Therapeutics common stock (valued based on a 5-day VWAP prior to closing).
- Contingent Milestone Payments: Up to an additional $85.0 million in stock upon achievement of platform or program milestones.
- Revenue Share: 10% of payments received from ZebiAI-related partnerships within three years of closing, capped at $100.0 million in cash.
Note: The filing does not provide specific revenue, profit, cash flow, or debt figures for Relay Therapeutics or ZebiAI for the reporting period.
Material Changes and Transaction Structure
The Company entered into a dual-merger structure to acquire ZebiAI:
- First Merger: A wholly-owned subsidiary (First Merger Sub) merges with ZebiAI, with ZebiAI surviving as a subsidiary.
- Second Merger: The surviving ZebiAI entity merges into a second wholly-owned subsidiary (Second Merger Sub).
Stock consideration is subject to lock-up restrictions: one-third is unrestricted, one-third is locked for 90 days, and one-third is locked for 180 days from issuance.
Guidance, Outlook, and Risks
Management Commentary: The Board of Directors determined the transaction is fair and in the best interests of the Company and its stockholders. The Company plans to file a resale registration statement with the SEC for the stock consideration.
Conditions to Closing: The transaction is subject to customary conditions, including the absence of legal prohibitions and the accuracy of representations and warranties.
Risks and Contingencies:
- Failure to satisfy closing conditions or termination of the Merger Agreement.
- Inability to file the required resale registration statement.
- Uncertainty regarding the achievement of future milestones or partnership agreements.
- General risks associated with the integration of ZebiAI's platform.
Investor Verification Checklist
- Verify the final closing date and whether all conditions precedent were satisfied.
- Confirm the exact number of shares issued for the $65.0 million stock component based on the closing VWAP.
- Review the specific definitions of the "platform or program-related milestones" required to trigger the $85.0 million contingent payments.
- Monitor the filing status of the resale registration statement for the stock consideration.
- Assess the impact of the $20.0 million cash outlay on the Company's current liquidity position.