American Oncology Network, Inc. (the "Company") has entered into a significant agreement with AEA Growth Management LP ("AEA"), according to a recent SEC filing. The agreement, effective as of Monday, July 19, 2024, outlines several shareholder protections that activate once AEA and its affiliates collectively own at least 40% of the Company's outstanding voting power.
Key provisions of the Stockholders Agreement include the appointment of two Independent Directors to the Company's board. AEA has agreed to support the election of these directors, which will include one mutually agreed upon independent director and one minority independent director. Additionally, the agreement mandates that the Nominating and Governance Committee will consist of at least two independent directors.
The pact also grants co-sale rights to other shareholders, allowing them to participate proportionately in any sale of more than 10% of the Company's equity securities initiated by AEA, subject to certain conditions.
For a period of two years following the agreement's effectiveness, the Company cannot amend its charter or bylaws in a way that disproportionately affects minority shareholders' rights or engage in transactions with AEA Parties without the consent of the Minority Independent Director, except for standard employee benefits and indemnification agreements.
The AEA Parties have also agreed to a standstill provision, promising not to increase their ownership stake to over 80% without the Minority Independent Director's written consent.
This Stockholders Agreement is set to terminate under various conditions, including if AEA's ownership falls below 25%, if all the Company's securities are held by entities other than AEA, or by June 10, 2027, if the agreement's conditions have not been met by that date.
The information for this report is based on a statement from a press release.
In other recent news, American Oncology Network (AON) announced its intention to voluntarily delist its Class A common stock and warrants from the Nasdaq Capital Market, a decision advised by a Special Committee of independent directors and approved by the Board. The delisting, expected to take effect with the filing of a Form 25 with the Securities and Exchange Commission, was considered advantageous due to factors such as the absence of research coverage and the substantial operational costs required for continued regulatory compliance. Despite the delisting, AON has experienced significant growth, with a five-year revenue compound annual growth rate (CAGR) of 42%, and a strong financial position, with over $100 million in cash and short-term securities.
On another front, AON has also expanded its board with the appointment of William "Bill" J. Valle, a veteran with a 14-year leadership background at Fresenius Medical Care (NYSE:FMS) AG Management and Fresenius Medical Care Holdings, Inc. Valle's appointment is part of AON's ongoing effort to enhance its governance and strategic direction. The company expects Valle's expertise to support its mission to improve access to cancer care and services in communities across the United States. These are among the recent developments at American Oncology Network.
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