Reported Earlier, Rain Oncology To Be Acquired By Pathos AI For $1.16/Share Plus Additional Contingent Value Rights

Pursuant and subject to the terms of the merger agreement, a subsidiary of Pathos will commence a tender offer to acquire all outstanding shares of Rain for $1.16 in cash per share plus a CVR representing a contractual right to receive two potential contingent aggregate cash payments as follows:

• Cash CVR Payment: an aggregate amount equal to $5.0 million (up to approximately $0.14 per share), minus (A) certain expenses incurred related to pending or future litigation involving Rain and its directors or officers, minus (B) any shortfall in a target level of net cash, plus (C) any cash at closing in excess of the target net cash.
• Development CVR Payment: either (i) $1.0 million (approximately $0.03 per share) upon the first patient dosed in a clinical stage study conducted by Pathos using milademetan within five years of the closing of the merger or (ii) 80% of the net proceeds from any license or disposition of milademetan effected within two years of the closing of the merger.

The closing of the tender offer is subject to certain conditions, including the tender of Rain shares representing at least one share more than 50% of the total number of outstanding shares of common stock as of immediately prior to consummation of the tender offer; the availability of at least $49.6 million of cash and cash equivalents, net certain liabilities at closing; and other customary conditions. In connection with the execution of the merger agreement, stockholders holding approximately 44.0% of the outstanding shares of Rain common stock have entered into support agreements with Pathos pursuant to which they have agreed to tender their shares in the tender offer.

Pathos has established a separate, wholly-owned subsidiary to complete the Transaction. Following the tender offer closing, this subsidiary will be merged into Rain with Rain as the surviving entity of the merger, which will then operate as a separate, wholly-owned subsidiary of Pathos. If the tender offer is successful, the Transaction is expected to close in January 2024.