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Subsequent Events
12 Months Ended
Dec. 31, 2020
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

NOTE 10. SUBSEQUENT EVENTS


The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the consolidated financial statements were issued. Based upon this review, other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the consolidated financial statements.


On February 23, 2021, the Sponsor advanced $50,000 to the Company.


Merger Agreement


On January 8, 2021, the Company entered into a Merger Agreement and Plan of Reorganization (the “Merger Agreement”) with First Merger Sub, Second Merger Sub, and Celularity Inc., a Delaware corporation (“Celularity”).


Pursuant to the Merger Agreement, at the closing of the transactions contemplated by the Merger Agreement (the “Closing”), and in accordance with the Delaware General Corporation Law, as amended (“DGCL”) (i) First Merger Sub will merge with and into Celularity (the “First Merger”), with Celularity surviving the First Merger as a wholly owned subsidiary of the Company (Celularity, in its capacity as the surviving corporation of the First Merger, is sometimes referred to as the “Surviving Corporation”); and (ii) immediately following the First Merger and as part of the same overall transaction as the First Merger, the Surviving Corporation will merge with and into Second Merger Sub (the “Second Merger” and, together with the First Merger, the “Mergers”), with Second Merger Sub being the surviving entity of the Second Merger (Second Merger Sub, in its capacity as the surviving entity of the Second Merger, is sometimes referred to herein as the “Surviving Entity”) (steps (i) and (ii) collectively with the other transactions described in the Merger Agreement, the “Celularity Business Combination”).


The aggregate merger consideration payable to stockholders of Celularity upon the Closing consists of up to 147,327,224 newly issued shares of Class A common stock of the Company, par value $0.0001 per share (“GX Class A Common Stock”) valued at approximately $10.15 per share.


Immediately prior to the effective time of the First Merger (the “Effective Time”), Celularity will cause each share of preferred stock of Celularity, par value $0.0001 per share, designated as Series A Preferred Stock, Series B Preferred Stock and Series X Preferred Stock, respectively (together, “Celularity Preferred Stock”) that is issued and outstanding immediately prior to the Effective Time to be automatically converted into a number of shares of common stock of Celularity, par value of $0.0001 per share (“Celularity Common Stock”) at the then-effective conversion rate as calculated pursuant to the Amended and Restated Certificate of Incorporation of Celularity, dated March 16, 2020, as may be amended, restated or otherwise modified from time to time (the “Celularity Charter”). All of the shares of Celularity Preferred Stock converted into shares of Celularity Common Stock will no longer be outstanding, and will cease to exist, and each holder of shares of Celularity Preferred Stock will thereafter cease to have any rights with respect to such securities.


On January 8, 2021, concurrently with the execution of the Merger Agreement, the Company entered into separate subscription agreements (the “Subscription Agreements”) with investors (each, a “PIPE Investor”), pursuant to which the PIPE Investors agreed to purchase, and we agreed to sell to the PIPE Investors, an aggregate of 8,340,000 shares of the Company’s Class A Common Stock (the “PIPE Shares”), for a purchase price of $10.00 per share and an aggregate purchase price of $83,400,000, in a private placement (the “PIPE Financing”), a portion of which is expected to be funded by (i) existing Celularity investors and affiliates (the “Celularity-Related PIPE Investors”) and (ii) certain additional investors. In comparison, the $10.00 per share purchase price of the PIPE Shares is equal to the price per unit offered to our public stockholders to acquire Units in the IPO (as defined below); however, unlike the Units issued in our IPO, the PIPE Shares do not include one-half of one redeemable warrant to acquire the Company’s Class A Common Stock or any redemption right, among other things.


The PIPE Investors are entitled to certain registration rights as fully described in our Registration Statement on Form S-4 filed with the SEC on January 25, 2021 (as amended from time to time, the “S-4 Registration Statement”).


For additional information regarding Celularity, the Merger Agreement and related agreements and the Celularity Business Combination, see the S-4 Registration Statement.


The Celularity Business Combination will be consummated subject to certain conditions as further described in the Merger Agreement.


Legal proceedings


On February 4, 2021, a putative class action lawsuit was filed in the Supreme Court of the State of New York by a purported stockholder of the Company in connection with the Celularity Business Combination: Spero v. GX Acquisition Corp., et al., Index No. 650812/2021 (N.Y. Sup Ct. Feb 04, 2021). On February 26, 2021, the same purported stockholder filed an amended complaint in the lawsuit removing the class action allegations and certain of the other allegations (the “Spero Complaint”). On February 8, 2021, a complaint was filed with the Supreme Court of the State of New York by a purported stockholder of the Company in connection with the Celularity Business Combination: Rogalla v. GX Acquisition Corp., et al., Index No. 650877/2021 (N.Y. Sup Ct. Feb 08, 2021) (the “Rogalla Complaint”, together with the Spero Complaint, the “Complaints”). The Complaints name the Company and current members of the Company’s board of directors as defendants. Additionally, the Rogalla Complaint names First Merger Sub, Second Merger Sub and Celularity as defendants. The Rogalla Complaint alleges breach of fiduciary duty claims against the Company’s board of directors in connection with the Business Combination and aiding and abetting the Company’s board of directors’ breaches of fiduciary duties claims against the Company, First Merger Sub, Second Merger Sub and Celularity. These claims are based on allegations that the S-4 Registration Statement related to the Celularity Business Combination is materially misleading and/or omits material information concerning the Celularity Business Combination. The Spero Complaint alleges breach of fiduciary duty claims against the Company’s board of directors in connection with the Business Combination and aiding and abetting the Company's board of directors' breaches of fiduciary duties claims against the Company. The claims are based on the sales process and valuation of the Company, as well as allegations that the S-4 Registration Statement related to the Celularity Business Combination is materially misleading and/or omits material information concerning the Celularity Business Combination. The Complaints generally seek injunctive relief or rescission, unspecified damages and awards of attorneys’ and experts’ fees, among other remedies. The Company believes that these allegations are without merit. These cases are in the early stages and the Company is unable to reasonably determine the outcome or estimate the loss, and as such, has not recorded a loss contingency. However, if the plaintiffs are successful in enjoining the Celularity Business Combination, the Celularity Business Combination would not be completed. In addition, the Company could be held liable for damages.


The Company’s board of directors also has received two demands from putative stockholders of the Company dated February 18, 2021 and March 2, 2021 (together, the “Demands”) alleging that the Company and the Company’s board of directors have breached their fiduciary duties and violated federal securities laws because the S-4 Registration Statement related to the Celularity Business Combination allegedly is materially misleading and/or omits material information concerning the Celularity Business Combination. The Demands seek the issuance of corrective disclosures in an amendment or supplement to the S-4 Registration Statement related to the Celularity Business Combination. The Company believes that these allegations are without merit.