Stakeholders Approve Asensus Merger with Karl Storz

Asensus Surgical announced in a special virtual meeting on Monday that its stockholders have voted in favor of a merger agreement with Karl Storz, where it will become a wholly-owned subsidiary.

In the meeting, about 59.2% of the total shares entitled to vote were there, with 137,258,840 voting in favor of the merger, 23,156,038 against, and 1,051,130 abstentions. Additionally, stockholders voted to approve certain compensation that “that may be paid to Asensus Surgical's named executive officers in connection with the merger,” according to Investing.com, on a non-binding advisory basis. The vote saw 123,817,981 in favor, 34,078,887 against, and 3,569,139 abstentions.

On the agenda was another proposal to adjourn a special meeting if it was necessary to gain additional proxies. However, this was not required as there were enough votes to approve the merger.

Asensus said that with stockholder approval now in hand, the company intends to close the merger transaction tomorrow, on August 22.

Last week, MD+DI reported that the company would have no choice but to file for bankruptcy protection if the merger collapsed, citing significant near-term financial obligations that would exceed the assets on its balance sheet.

“We do not believe we are in a position to raise the capital needed to fund these expenses and also to continue funding operations,” said Anthony Fernando, president and CEO of Asensus, in the company’s Q2 earnings call. “Therefore, if the merger is not approved, we expect to seek bankruptcy protection.”

Its financial obligations include repayment of $20 million of securitized notes with interest and prepayment premium and other associated transactions to Karl Storz. Of note, the company said that Karl Storz has a security interest in all of its assets, meaning “Karl Storz holds a legal claim over our company’s assets as collateral for the debt that we owe them,” Fernando said.

In a bankruptcy scenario, this would mean that Karl Storz would have priority over other creditors and stockholders in claims against Ascensus, also resulting in the potential for stockholders to receive less than the merger consideration.