Rachel Klemovitch, Assistant Editor07.10.24
ReShape Lifesciences, the premier physician-led weight loss and metabolic health solutions company, and Vyome Therapeutics, Inc., a private clinical-stage company targeting immuno-inflammatory and rare diseases, have entered into a definitive merger agreement under which ReShape and Vyome will combine in an all-stock transaction.
The agreement outlines that existing ReShape stockholders will own approximately 11.1% of the combined company following the closure of the merger. An adjustment will be based on ReShape’s net cash at closing compared to the target net cash amount of $5 million.
At the closing of the merger, ReShape will be renamed Vyome Holdings, Inc. and expects to trade under the Nasdaq ticker symbol “HIND,” representing the company’s alignment with the U.S.-India relationship.
The board of directors of the combined company will be comprised of six directors designated by Vyome and one director designated by ReShape and executive management of the combined company will consist of Vyome’s executive officers.
The merger agreement has been unanimously approved by the board of directors of both companies.
The combined company will focus on advancing the development of its immuno-inflammatory assets and on identifying additional opportunities between the world-class Indian innovation corridor and the U.S. market.
ReShape and Vyome subsidiary, Vyome Therapeutics have entered into agreements with certain existing accredited investors, under which the investors have committed to purchase a minimum of $7.3 million in securities of ReShape, Vyome, and Vyome’s subsidiary. Under these agreements, certain accredited investors have agreed to purchase up to $5.8 million in shares of common stock of the combined company immediately following completion of the merger which may be upsized through additional investments.
ReShape has also entered into an asset purchase agreement with Biorad Medisys. The company will sell substantially all of its assets to Biorad (or an affiliate thereof), including ReShape’s Lap-Band System, Obalon Gastric Balloon System, and the Diabetes Bloc-Stim Neuromodulation (DBSN) System (but excluding cash).
Biorad will assume substantially all of ReShape’s liabilities, for a purchase price of $5.16 million in cash, subject to adjustment based on ReShape’s actual accounts receivable and accounts payable at the closing compared to such amounts as of March 31, 2024.
The cash purchase price under the asset purchase agreement will count toward ReShape’s net cash for purposes of determining the post-merger ownership allocation between ReShape and Vyome stockholders under the merger agreement.
“Through the orchestration of the merger agreement with Vyome Therapeutics and the simultaneous asset purchase agreement with Biorad, we were able to maximize stockholder value,” Paul F. Hickey, President and Chief Executive Officer of ReShape Lifesciences told the press. “After reviewing various strategic alternatives and engaging in discussions with a number of other potential merger and acquisition candidates, our board of directors has unanimously recommended the merger with Vyome and simultaneous asset sale to Biorad, which we believe is a compelling opportunity for our stockholders to benefit from the potential of the combined company after the merger.”
Completion of the merger and the asset sale are subject to certain closing conditions.
Maxim Group LLC is serving as financial advisor to ReShape in connection with the transactions and Fox Rothschild LLP is acting as its legal counsel. Chardan is serving as financial advisor to Vyome for the merger and Sichenzia Ross Ference Carmel LLP is acting as its legal counsel.