8-K: Longevity Health Holdings to Merge with 20/20 BioLabs in All-Stock Deal

Longevity Health Holdings announces a merger agreement with 20/20 BioLabs to expand into diagnostics and address chronic disease management.

Summary

• Longevity Health Holdings (XAGE) has entered into a merger agreement with 20/20 BioLabs in an all-stock transaction.
• The merger aims to combine Longevity's focus on regenerative bio-aesthetics with 20/20 BioLabs' innovative laboratory tests for chronic disease risk detection.
• Post-closing, the combined company is expected to continue trading on Nasdaq under the ticker symbol XAGE.
• 20/20 BioLabs operates a CLIA Licensed, CAP Accredited lab in Gaithersburg, MD.
• 20/20's OneTestTM, a multi-cancer early detection (MCED) blood test, detects more than a dozen tumor types and is priced under $200.
• A 2024 blinded study by the U.S. National Cancer Institute demonstrated that OneTestTM, likely detects many types of cancers at earlier stages than other leading MCEDs.
• The combined company's post-closing equity valuation is expected to be approximately $99 million, with 20/20 having a pre-money equity valuation at approximately $50 million.
• The merger is expected to double Longevity's fiscal year 2025 anticipated revenue from approximately $3-4 million to approximately $7-8 million.
• The combined company expects to realize over $1 million in operational savings and synergies in fiscal year 2025.
• 20/20 pre-Merger stockholders are expected to own approximately 50.1% of the combined company and Longevity pre-Merger stockholders are expected to own approximately 49.9% of the combined company upon the Closing, prior to the additional concurrent financing transaction.
• The percentage of the combined company that each company's former stockholders are expected to own may be adjusted based on the achievement of the earnout milestones, which would result in an increase in the percentage ownership of the pre-Merger 20/20 stockholders.
• The transaction is expected to close in the third quarter of 2025, subject to customary closing conditions, including approvals by the stockholders of each company.
• Upon the Closing, Mr. Rajiv Shukla, Chairman and CEO of Longevity, will remain Chairman while Mr. Jonathan Cohen will be appointed CEO of the combined company.
• Prior to or concurrently with the Closing, the Company will consummate a financing through the sale of Company securities (the Concurrent Financing) to raise minimum gross proceeds of $4,000,000 (including only up to $2,000,000 of debt) on such terms as mutually agreed to by the Company and Biolabs.

Sentiment

Score: 7

Explanation: The document presents a positive outlook on the merger, highlighting expected revenue growth, operational synergies, and market expansion. However, it also acknowledges potential risks and uncertainties, resulting in a moderately positive sentiment score.

Positives

• The merger is expected to create synergies between Longevity's bio-aesthetic products and 20/20 BioLabs' diagnostic tests.
• The combined company is expected to have a post-closing equity valuation of approximately $99 million.
• The merger is expected to double Longevity's fiscal year 2025 revenue to approximately $7-8 million and realize over $1 million in operational savings.
• 20/20 BioLabs' OneTestTM is a multi-cancer early detection blood test priced under $200.
• The combined company will offer a broader range of products and services to a larger customer base.
• The merger is expected to put the company on the path to profitability.

Risks

• The transaction is subject to customary closing conditions, including approvals by the stockholders of each company.
• There are risks related to Longevity's ability to maintain its listing on the Nasdaq Capital Market and to manage its operating expenses and its expenses associated with the proposed Merger pending the Closing.
• There are risks related to the failure or delay in obtaining required approvals from any governmental or quasi-governmental entity necessary to consummate the proposed Merger.
• There is a risk that as a result of adjustments to the exchange ratio, each company's stockholders could own more or less of the combined company than is currently anticipated.
• There are risks related to the market price of Longevity's common stock relative to the value suggested by the exchange ratio.
• There are potential adverse reactions or changes to business relationships resulting from the announcement or completion of the proposed Merger.
• There is a risk that the concurrent financing is not consummated prior to the Closing.
• There is a risk of unknown liabilities arising after the Merger.

Future Outlook

The combined company will seek to address the epidemic of chronic disease in America under the banner Healthy Aging, Inside and Out, increasingly recognized as an urgent priority by healthcare leaders and policy makers. The company anticipates announcing further acquisitions in fiscal year 2025 that it believes will be value accretive to its stockholders.

Management Comments

• Mr. Jonathan Cohen, CEO of 20/20, stated that they are excited by the market, product and operational synergies between 20/20 and Longevity and expect the Merger will expand their reach to MedSpas and other channels covered by Longevity's existing customer base.
• Mr. Rajiv Shukla, Chairman and CEO of Longevity, stated that the merger is expected to double their fiscal year 2025 revenue forecast and put them on the path to profitability and that they anticipate announcing further acquisitions in fiscal year 2025 that they believe will be value accretive to their stockholders.

Industry Context

This announcement reflects a trend in the healthcare industry towards consolidation and diversification of services to address a broader range of patient needs, particularly in the growing market for healthy aging and chronic disease management.

Comparison to Industry Standards

• The multi-cancer early detection (MCED) market is competitive, with companies like Grail (acquired by Illumina), Exact Sciences, and Freenome also developing and marketing similar tests.
• 20/20 BioLabs' OneTestTM differentiates itself by offering a lower price point (under $200) and using capillary blood specimens for less painful sample collection.
• The expected post-closing equity valuation of approximately $99 million for the combined company is relatively small compared to larger players in the diagnostics and bio-aesthetics industries.
• The expected doubling of Longevity's fiscal year 2025 revenue to $7-8 million is a significant increase, but still modest compared to established companies in these sectors.

Management Changes

Stakeholder Impact

• Shareholders of both Longevity Health Holdings and 20/20 BioLabs will be impacted by the merger, with potential changes in ownership percentages and stock value.
• Employees of both companies may experience changes in roles and responsibilities as a result of the integration.
• Customers of both companies will have access to a broader range of products and services.
• Suppliers and partners of both companies may be affected by changes in procurement and business relationships.

Next Steps

• Obtain stockholder approvals from both Longevity Health Holdings and 20/20 BioLabs.
• Complete the concurrent financing.
• Satisfy all customary closing conditions.
• Close the merger transaction, expected in the third quarter of 2025.
• Integrate the operations of Longevity Health Holdings and 20/20 BioLabs.
• Execute the post-closing budget and cash flow plan.
• Continue to seek value accretive acquisitions.

Key Dates

Keywords

merger, acquisition, diagnostics, bio-aesthetics, Longevity Health Holdings, 20/20 BioLabs, revenue, synergies, stock, CLIA, OneTest, cancer detection, healthcare, biomarkers