BioXcel Therapeutics - Chapter 11 Bidding Procedures / APA Summary

Bidding Procedures / Stalking Horse Asset Purchase Agreement Summary

Case Information

• In re BioXcel Therapeutics, Inc., et al., Case No. 26-11360 (TMH), United States Bankruptcy Court for the District of Delaware (Jointly Administered), before Judge Thomas M. Horan. The Debtors are BioXcel Therapeutics, Inc. (6754), OnkosXcel Therapeutics, LLC (2522) and OnkosXcel Employee Holdings, LLC (0534), with a service address of 555 Long Wharf Drive, 12th Floor, New Haven, Connecticut 06511.
• Proposed co-counsel to the Debtors are Cooley LLP and Young Conaway Stargatt & Taylor, LLP; MTS Health Partners, L.P. is the investment banker; Stretto, Inc. is the claims and noticing agent; Ropes & Gray LLP is counsel to the Stalking Horse Bidder; and Sullivan & Cromwell LLP, Richards, Layton & Finger, P.A. and DLA Piper LLP (US) are counsel to the DIP Lender Advisors.

Bidding Procedures Order

• On Sept. 28, 2026, the Court entered the Bidding Procedures Order [Docket No. 179] granting the Debtors' motion [Docket No. 13]. The order approves the Bidding Procedures and authorizes the Debtors to designate the Stalking Horse Bidder and enter into the Stalking Horse APA, subject to final Court approval at the Sale Hearing. It also grants the Bid Protections, approves the Assumption and Assignment Procedures and the forms of the Contract Assumption and Assignment Notice and Sale Hearing Notice, and schedules the Auction and Sale Hearing. All objections not withdrawn, waived, settled or specifically addressed in the order were overruled.
• The Court made the following findings:
  • The Bidding Procedures are fair, reasonable and appropriate and are designed to maximize value.
  • The Stalking Horse APA was entered into in good faith and at arm's length.
  • The Debtors demonstrated compelling and sound business justifications for entering into the Stalking Horse APA and for providing the Bid Protections. The Bid Protections are an essential inducement and condition of the Stalking Horse Bidder's entry into, and continuing obligations under, the Stalking Horse APA.
  • Neither the Stalking Horse Bidder nor any of its affiliates or principals is an "insider" or "affiliate" of the Debtors.
  • The Bidding Procedures substantially comply with Local Rule 6004-1.
• The order amends and restates Section 8.2.10(c) (Bid Protections enforcement costs) and Section 5.7.6 (Backup Bidder obligations) of the Stalking Horse APA, as reflected below.
• To the extent any provision of the order is inconsistent with the Motion, the Bidding Procedures or the Stalking Horse APA, the order controls. The order is immediately effective and enforceable upon entry, and the Court retains jurisdiction over all matters arising from its implementation or interpretation.

Parties Involved

• Sellers: BioXcel Therapeutics, Inc., a Delaware corporation; OnkosXcel Therapeutics, LLC, a Delaware limited liability company; and OnkosXcel Employee Holdings, LLC, a Delaware limited liability company
• Purchaser: Teva Pharmaceuticals International GmbH, a Swiss limited liability company, as the Stalking Horse Bidder, with Teva Pharmaceutical Industries Limited, an Israeli company, joining solely for purposes of Section 9.16 of the Stalking Horse APA as guarantor of the Milestone Payments
• The Buyer is a wholly-owned indirect subsidiary of Parent.
• The Stalking Horse Bidder is a third-party purchaser unrelated to the Debtors and is not an "insider" or "affiliate" of the Debtors within the meaning of section 101 of the Bankruptcy Code or Local Bankruptcy Rule 6004-1(b)(iv)(A). No common identity of incorporators, directors, or controlling stockholders exists between the Stalking Horse Bidder and the Debtors.
• The Stalking Horse APA and the Bid Protections were the product of extensive, good faith, arm's-length negotiations between the Debtors and the Stalking Horse Bidder, each represented by sophisticated counsel.
• The proposed Sale Order contemplates mutual releases among the Sellers, the Buyer, and certain related persons and entities, effective as of the Closing, subject to carve-outs for actual fraud (but not fraudulent conveyance claims).

Background and the Debtors' Business

• The Debtors filed voluntary chapter 11 petitions on Aug. 27, 2026, and are operating as debtors in possession under sections 1107(a) and 1108 of the Bankruptcy Code. No official committee has been appointed and no request has been made for a trustee or examiner.
• The Debtors are a biopharmaceutical company built on identifying new therapeutic indications for existing approved drugs and/or clinically evaluated product candidates. The cases were commenced to pursue a value-maximizing sale of all or substantially all of the Debtors' assets.
• BXCL501, the Debtors' most advanced neuroscience clinical development program, is a proprietary, orally dissolving film formulation of dexmedetomidine in development for the treatment of agitation associated with psychiatric and neurological disorders.
• IGALMI® (dexmedetomidine) is the Debtors' only currently approved and marketed product — a sublingual film placed under the tongue or behind the lower lip to treat acute agitation in adults with schizophrenia or bipolar I or II disorder, currently approved by the FDA for self-administration under the supervision of a healthcare provider.
• Under its SERENITY program, BioXcel has a pending supplemental new drug application seeking approval of IGALMI® for at-home use in the acute treatment of agitation associated with bipolar disorders or schizophrenia. The FDA has set a target action date for the sNDA of Nov. 14, 2026.
• Through its TRANQUILITY program, BioXcel is evaluating BXCL501 as a potential treatment for agitation associated with Alzheimer's dementia, which, if approved, could significantly increase the commercial opportunities for BXCL501 and IGALMI®.
• BXCL701, held through Debtor OnkosXcel Therapeutics, LLC, is the Debtors' most advanced immuno-oncology asset — an investigational oral innate immune activator being evaluated as a potential therapy for aggressive forms of prostate cancer, pancreatic cancer, and other solid and liquid tumors.
• The Debtors have also identified BXCL502 (latrepirdine), planned for evaluation as a potential monotherapy and possibly in combination with BXCL501 for chronic treatment of agitation in patients with dementia and for acute stress disorder, as well as additional pipeline concepts BXCL503 and BXCL504, explored as potential treatments for apathy and aggression, respectively, in patients with dementia.

Prepetition Marketing Process

• In September 2025, BioXcel announced positive topline results from its SERENITY At-Home Phase 3 safety trial, which demonstrated a favorable safety profile for BXCL501 administered in the at-home setting without healthcare provider supervision. The Debtors sought to leverage those results as a catalyst for renewed interest from potential strategic partners and investors.
• In the fall of 2025, the Debtors engaged MTS Health Partners, L.P. as investment banking advisor to evaluate strategic options to maximize shareholder value and advance the commercial and development plans for IGALMI®, including a potential sale of BioXcel, a merger or other business combination, a collaboration, joint venture or license agreement, or a significant private placement.
• MTS and management conducted extensive outreach to a broad universe of potential strategic partners and acquirers, including pharmaceutical companies with existing neuroscience franchises and specialty pharmaceutical companies with established commercial platforms suited to the IGALMI® opportunity. Multiple parties expressed interest and engaged in due diligence on the Debtors' assets, clinical data, regulatory status, and commercial potential.
• Teva Pharmaceutical Industries Ltd. emerged as the most viable strategic bidder, conducting extensive due diligence on the Debtors' assets and regulatory portfolio, including the pending sNDA for IGALMI® at-home use, and ultimately submitting a non-binding letter of intent proposing to acquire substantially all of the Debtors' assets through a section 363 sale process, with Teva serving as stalking horse bidder.
• Although the Debtors received meaningful engagement from several other prospective buyers and investors, their significant existing debt obligations under their prepetition credit facility presented a substantial impediment to an out-of-court transaction; the magnitude of the secured indebtedness relative to enterprise value made it difficult for prospective acquirers to structure a transaction that would satisfy existing creditors, fund ongoing operations, and deliver meaningful value to equity holders on a consensual basis.
• The Board of Directors and Strategic Process Committee, with input from MTS and the Debtors' legal and restructuring advisors, determined that a section 363 sale presented a stronger value proposition than a standalone financing strategy given constrained liquidity, the magnitude of the debt obligations, the uncertainty surrounding additional capital raises, and the near-term regulatory milestones a well-capitalized acquirer would be positioned to pursue.
• The designation of the Stalking Horse Bidder was a requirement to secure the debtor-in-possession financing necessary for the Debtors to operate as a going concern in order to continue the sale process.

DIP Financing and Need for a Timely Process

• The Debtors entered these cases with access to up to $19 million in new money postpetition secured funding from the DIP Lenders, in addition to $1.25 million in emergency bridge financing, which was required to cover the operating and administrative costs necessary to finalize the Stalking Horse APA and commence these cases.
• The Debtors' liquidity remains limited and will not allow for the administration of these cases indefinitely. The Debtors and the DIP Lenders have accordingly agreed to Sale Milestones consistent with the deadlines required under the Stalking Horse APA.

Assets Being Sold

• The Purchased Assets, set forth in Section 2.1 of the Stalking Horse APA, comprise substantially all of the Sellers' assets and rights used or held for use in the Business, other than the Excluded Assets, free and clear of all Encumbrances other than Permitted Encumbrances. The Products covered by the Stalking Horse APA are defined to include BXCL501, BXCL502, BXCL503, BXCL504, BXCL701, BXCL702, the Approved Hospital Product (IGALMI® as currently approved for administration under healthcare provider supervision), the Milestone Product, and all investigational uses of the foregoing.
• The Debtors' principal assets for sale consist of their intellectual property and patent portfolio, which, as of Aug. 3, 2026, included 13 U.S. utility applications, 17 issued U.S. utility patents, 41 pending non-U.S. utility applications, 29 allowed or granted non-U.S. patents (including five in Japan), one pending U.S. design patent application, and two registered design patents in Japan.
• Purchased Assets include, among other items:
  • The Purchased Contracts set forth in Section 2.1.1(a) of the Seller Disclosure Schedules, including all manufacturing and chemistry, manufacturing, and controls-related contracts, know-how and documentation;
  • The Acquired IP and Purchased Technology, including all rights to sue for past, present and future infringement, misappropriation or violation thereof, and all intellectual property rights related to the Products, including patents, patent applications, trademarks and trade secrets;
  • All regulatory filings, approvals and correspondence with the FDA related to the Products, including the sNDA, and all Purchased Regulatory Approvals to the extent transferable under law;
  • All clinical data, preclinical data and research materials related to the Products;
  • The Purchased Product Records, the Purchased Permits, all Finished Goods Inventory owned by and in the possession or custody of Sellers, all advertising, marketing, sales and promotional materials relating to the Products, all pre-paid expenses and security deposits, all Employee Equipment, all Accounts Receivable, and all goodwill related to the Business, the Purchased Assets and/or the Assumed Liabilities.
• Pursuant to Section 2.1.1(u), the Purchased Assets include all Avoidance Actions, and the proceeds thereof, against any of Sellers' vendors, suppliers, customers or trade creditors with whom the Buyer continues to conduct business in regard to the Purchased Assets after the Closing and any of their affiliates, including actions under sections 502(d) and 544 through 553 of the Bankruptcy Code or arising under analogous state law.
• The Buyer will not acquire the Excluded Assets, including any Excluded Contract and the other assets set forth on Section 2.1.2 of the Seller Disclosure Schedules, which the Sellers will retain following the Closing. The Excluded Assets include the Sellers' cash and cash equivalents; equity interests in any Seller or other person, together with the Sellers' organizational documents and original Tax Returns; specified bank accounts; the Debtors' directors' and officers' liability insurance policies and all recoveries and claims thereunder; all claims against current and former directors and officers of the Sellers; the Retained Actions identified on the Seller Disclosure Schedules; the sponsorship and assets of all Plans; the Sellers' Tax assets, including net operating loss carryforwards, Tax credits and Tax refunds; retainers or advances paid to the Debtors' professionals; and materials subject to the attorney-client privilege or work product doctrine relating to Excluded Assets or Excluded Liabilities.
• At the Closing, the Buyer will assume only the Assumed Liabilities, limited under Section 2.2.1 of the APA to Liabilities arising under the Purchased Contracts — including Cure Costs, subject to the $2,500,000 Cure Costs Cap, and obligations arising and becoming due from and after the Closing Date, excluding Liabilities relating to pre-Closing breaches — together with the Buyer's share of Transfer Taxes. Neither the Buyer nor any of its affiliates will assume or become responsible for any Excluded Liabilities, including in respect of Taxes.

Designation Rights

• Notwithstanding anything to the contrary in the Bidding Procedures Order or the Bidding Procedures, the Stalking Horse Bidder may, in its sole discretion, at any time up to two business days prior to the closing of the Sale, designate additional assets to be excluded — by delivering written notice to Sellers and an updated Section 2.1.2 of the Seller Disclosure Schedules — with such assets thereafter constituting Excluded Assets without any adjustment to the Purchase Price.

Stalking Horse Bid

• The Debtors and the Stalking Horse Bidder entered into the Stalking Horse APA on Aug. 27, 2026. The aggregate consideration for the Purchased Assets consists of:
  • An Upfront Payment of $57.5 million in cash at Closing, less the Deposit (together with any investment interest thereon) and less the excess, if any, of Cure Costs over the $2.5 million Cure Costs Cap;
  • The potential for up to $67.5 million in contingent Milestone Payments, comprised of a Development Milestone Payment and Commercial Milestone Payments, in each case subject to achievement of the applicable Milestone Events; and
  • The assumption of the Assumed Liabilities.
• The Sale to the Stalking Horse Bidder is subject to higher or otherwise better offers submitted in accordance with the Bidding Procedures.
• The Stalking Horse Bidder is a Qualified Bidder, the Stalking Horse APA is a Qualified Bid, and the Stalking Horse Bidder is authorized to submit Overbids at the Auction, in each instance without further qualification.
• The Stalking Horse APA includes representations, warranties, covenants, and closing conditions; the Material Adverse Effect definition expressly excludes a materially unfavorable FDA notification or response to the sNDA or the referenced investigational new drug applications, so an adverse sNDA outcome would not itself excuse the Buyer from closing — it bears only on the contingent Milestone Payments, including with respect to the conduct of the business.

Milestone Payments

• The Milestone Payments consist of Development Milestone Payments and Commercial Milestone Payments, both tied to FDA approval of the pending sNDA for IGALMI® (dexmedetomidine) sublingual film for at-home use (the Milestone Product).
• Development Milestone Payments, of which only one is payable:
  • $67.5 million if sNDA approval is received on or prior to Nov. 21, 2026;
  • $55 million if sNDA approval is received after Nov. 21, 2026, but on or prior to Feb. 28, 2027;
  • $20 million if sNDA approval is received after Feb. 28, 2027, but on or prior to May 31, 2027; or
  • $5 million if sNDA approval is received after May 31, 2027, but on or prior to Nov. 30, 2027.
• Commercial Milestone Payments apply only if sNDA approval is not received on or prior to Feb. 28, 2027, and are tied to Net Sales of the Milestone Product:
  • $10 million upon first achievement of annual Net Sales of $250 million or more on or prior to Dec. 31, 2035; and
  • An additional $10 million upon first achievement of annual Net Sales of $500 million or more on or prior to Dec. 31, 2035.
• No Commercial Milestone Payments are payable if either of the two highest Development Milestone Events is achieved, and the Buyer is not required to provide notice or make payment with respect to any Commercial Milestone Event not achieved by Dec. 31, 2035.
• Depending on the triggering event, Development and Commercial Milestone Payments may be owed to the Sellers after the completion of these chapter 11 cases.
• The Buyer's obligation to pay any Milestone Payment arises only upon and after the Closing and the first achievement of the applicable Milestone Event. If the Buyer fails to pay any Milestone Payment in full by the applicable Milestone Due Date, interest accrues on the unpaid amount at Prime plus 3% per annum.
• The Buyer covenants not to take any material action, or omit to take any action, primarily intended to delay or avoid payment of any Milestone Payment (the Milestone Payment Covenant). Parent unconditionally and irrevocably guarantees payment of the Milestone Payments.
• The Buyer may deduct from any unpaid Milestone Payment 50% of any payments it or its affiliates make, or become obligated to make, in exchange for a license or other right to use or practice Intellectual Property acquired from a third party after the Closing that is necessary to exploit a Milestone Product, provided that no Milestone Payment may be reduced by more than 50% of the amount otherwise payable on that account. The deduction does not apply to ordinary-course maintenance fees for Owned IP, amounts paid to a patent authority or outside counsel for filing, prosecuting or maintaining Intellectual Property after the Closing, or amounts paid to a Governmental Authority in connection with seeking approval of the Milestone Product.
• Notice and payment mechanics: for a Development Milestone Event, the Buyer must notify the Sellers in writing within 10 business days of becoming aware of the FDA approval giving rise to the earliest achieved milestone, and must pay within 30 business days after achievement; if a Development Milestone Event occurs before the Closing, payment is due within 10 business days after the later of achievement and the Closing Date. For a Commercial Milestone Event, the Buyer must notify the Sellers within 45 business days after the calendar quarter in which the event is first achieved and pay within 45 business days after receipt of the Sellers' invoice.
• Apart from the Milestone Payment Covenant, the Stalking Horse APA expressly disclaims any guarantee or prediction that any Milestone Event will be achieved and imposes no efforts, diligence or activity obligation on the Buyer. The Buyer and its affiliates may research, develop, acquire, license or commercialize technologies or products similar to or competitive with the Milestone Product, may own, operate, license or exploit the Purchased Assets as they deem appropriate in their sole business judgment, and owe no fiduciary or implied duty to the Sellers in connection with the operation of the Business after the Closing. The Sellers disclaim reliance on any projections, representations or forward-looking statements regarding the prospects of any Product.
• Any dispute over the Buyer's compliance with the Milestone Payment Covenant is subject to binding arbitration before a single JAMS arbitrator in New York, New York, under the JAMS Comprehensive Arbitration Rules, with authority to award damages, injunctive relief or any other remedy available at law or in equity. The non-prevailing party bears all arbitration costs, including the arbitrator's fees, and the prevailing party's reasonable attorneys' fees calculated solely on an hourly basis without any contingency arrangement, enhancement or multiplier.

Bid Protections

• Break-Up Fee:
  • $1.15 million if there is no FDA Regulatory Approval of the sNDA for the Milestone Product prior to the date of termination of the Stalking Horse APA; or
  • $5 million if FDA Regulatory Approval of the sNDA for the Milestone Product occurs prior to the date of termination of the Stalking Horse APA. The Debtors state that the increase accounts for the increased risk to closing the transaction in the event the sNDA is approved on an earlier schedule than anticipated.
• Expense Reimbursement: reimbursement of all actual, documented and reasonable out-of-pocket fees and expenses incurred by the Stalking Horse Bidder, including the reasonable fees, costs and expenses of any professionals retained in connection with the authorization, preparation, investigation, negotiation, execution and performance of the Stalking Horse APA, including the chapter 11 cases and related judicial and regulatory proceedings, up to an aggregate amount of $575,000.
• The base Break-Up Fee and the Expense Reimbursement together represent 3% of the Upfront Payment. For purposes of assessing Bids and during the course of the Auction, the Break-Up Fee will be valued at $1.15 million.
• The Debtors' obligation to pay the Bid Protections constitutes, pursuant to sections 105(a), 503(b) and 507(a)(2) of the Bankruptcy Code, allowed superpriority administrative expense claims with priority over all other section 503(b) administrative expenses, junior only to any superpriority administrative expense claims granted in connection with the operative Financing Order (and the Carve Out and any other claims carved out from the liens and superpriority claims granted thereunder and/or any cash collateral order), and will survive termination of the Stalking Horse APA.
• Payment triggers: the Expense Reimbursement is payable on any termination of the Stalking Horse APA other than (i) by mutual written agreement, (ii) by the Buyer for the Debtors' failure to file the chapter 11 cases by the agreed deadline, or (iii) by the Sellers for the Buyer's material breach or its failure to fund at Closing, and is due within five business days of termination. The Break-Up Fee is payable in addition to the Expense Reimbursement on termination by the Buyer for the Debtors' material breach of the Stalking Horse APA, the Bidding Procedures Order or the Sale Order; on termination in connection with the Debtors' pursuit or consummation of an Alternative Transaction with another party; or on the Debtors' exercise of their fiduciary out. Under Section 8.2.10(c), as amended and restated by the Bidding Procedures Order, if the Sellers fail to pay the Break-Up Fee or Expense Reimbursement and the Buyer commences litigation that results in a judgment against any of the Sellers, the Sellers must pay the Buyer's costs and expenses, including attorneys' fees and disbursements, in connection with that litigation.
• The Bid Protections are deemed earned upon entry of the Bidding Procedures Order but are due and payable only pursuant to the terms and conditions of the Stalking Horse APA. The Debtors are authorized, without further action or order of the Court, to pay the Bid Protections on those terms, including by wire transfer to one or more bank accounts of the Stalking Horse Bidder or any of its Affiliates designated in writing by the Stalking Horse Bidder. The Debtors may not modify any aspect of the Bid Protections without the Stalking Horse Bidder's express written consent.
• The parties acknowledge that the Break-Up Fee and Expense Reimbursement are not a penalty, but rather liquidated damages in a reasonable amount compensating the Buyer for efforts and resources expended and opportunities foregone, and were a material inducement to the Buyer's decision to submit its bid and serve as stalking horse bidder.
• No party other than the Stalking Horse Bidder is entitled to any expense reimbursement, break-up fee, "topping," termination or similar fee. By submitting a bid, each bidder is deemed to have waived any right to request such payment or any other sale-related fee, whether under section 503(b) of the Bankruptcy Code or otherwise. Any substantial contribution claim by a Potential Bidder is deemed waived to the extent based solely on its submission of a Bid.

Credit Bid

• Neither the DIP Secured Parties nor the Prepetition Secured Parties may credit bid, directly or indirectly, whether pursuant to section 363(k) of the Bankruptcy Code or otherwise, for any of the Assets subject to the Stalking Horse Bid, for so long as (i) the Stalking Horse APA has not been terminated in accordance with its terms and (ii) the Stalking Horse Bidder is not in breach of any of its material obligations thereunder.

Participation and Due Diligence Requirements

• To participate in the bidding process, an Interested Party (other than the Stalking Horse Bidder) must deliver Preliminary Bid Documents to MTS via email, consisting of:
  • An executed confidentiality agreement on terms reasonably acceptable to the Debtors;
  • A statement and other factual support demonstrating to the Debtors' satisfaction a bona fide interest in purchasing the Assets;
  • A description of any and all connections the Interested Party (including its affiliates and related persons) may have to the Debtors, any current or former directors or officers of the Debtors, the Debtors' non-Debtor affiliates, and the Debtors' primary creditors as identified by the Debtors; and
  • Preliminary written proof of financial capacity to close at the Purchase Price and of adequate assurance of future performance under any executory contracts and unexpired leases to be assumed and assigned, the adequacy of which the Debtors will determine in their sole discretion.
• Upon determining that an Interested Party has satisfied its obligation to provide the Preliminary Bid Documents, the Debtors will provide such Potential Bidder with reasonable due diligence information and access to the confidential electronic Data Room, provided that the Debtors may reasonably withhold or limit access at any time and for any reason.

Bid Requirements

• Bids must be submitted to MTS via email so as to be actually received by the Bid Deadline. To constitute a Qualified Bid, a Bid (other than the Stalking Horse Bid) must, among other requirements:
  • Include a letter stating that the offer is irrevocable and binding until the closing of the Sale if the bidder is the Successful Bidder, and that the bidder agrees to serve as Backup Bidder if its Bid is the next highest or otherwise next best Bid;
  • Fully disclose the identity of the party submitting the Bid (and any equity holders, limited partners, or other financial backer or guarantor), its full legal name, jurisdiction of incorporation or formation, location in the bidder's corporate structure, and authorized representatives;
  • Clearly identify the Assets to be purchased (including whether any are subject to the Stalking Horse APA), the liabilities and obligations to be assumed, and whether the bidder intends to operate the Debtors' business as a going concern;
  • Include a list specifying in detail which unexpired leases and executory contracts are to be assumed and assigned;
  • Clearly set forth the cash and any non-cash consideration comprising the Purchase Price, which must satisfy the Minimum Bid requirements; the Debtors may favor cash consideration over any other type of consideration offered;
  • Be accompanied by a Good Faith Deposit;
  • Include an executed asset purchase agreement with all exhibits and schedules and, for any bid including Assets subject to the Stalking Horse APA, a copy of the proposed asset purchase agreement marked against the Stalking Horse APA;
  • Include written evidence of financial ability to timely close, including contact information for verification of financing sources, evidence of internal financing resources and, if applicable, fully executed and effective financing commitments enforceable by the Debtors with limited conditionality in an aggregate amount equal to the cash portion of the Bid (including, if applicable, payment of Cure Amounts), and any other financial disclosure or credit-quality support requested by the Debtors;
  • Include sufficient information to establish adequate assurance of future performance under section 365 of the Bankruptcy Code to non-Debtor counterparties;
  • Contain written evidence satisfactory to the Debtors of authorization and approval from the bidder's board of directors or comparable governing body;
  • Not be conditioned on unperformed due diligence, obtaining financing or any internal approval, and not be subject to contingencies more burdensome to the Debtors than those in the Stalking Horse APA;
  • Disclaim any right to any break-up fee, termination fee, expense reimbursement or similar payment;
  • Be reasonably likely to be consummated, if selected as the Successful Bid, by no later than Oct. 30, 2026, subject to permitted extensions consistent with the Stalking Horse APA, and include a perspective on any potential regulatory issues, including a description of all governmental, licensing, regulatory or other filings, approvals or consents required, evidence of the ability to obtain them, and an estimated timeframe;
  • Include statements that the bidder has acted in good faith consistent with section 363(m) of the Bankruptcy Code and agrees to be bound by, and has complied with, the Bidding Procedures;
  • Include a written acknowledgment that the bidder has not engaged in, and agrees not to engage in, any collusion subject to section 363(n) of the Bankruptcy Code; and
  • Contain such other information as may be reasonably requested by the Debtors.
• The Debtors are authorized to approve joint Bids in the exercise of their business judgment on a case-by-case basis, subject to the restrictions on communications among Potential Bidders and provided the Debtors authorize any joint Bid in writing.
• All Potential Bidders and Qualified Bidders, including the Stalking Horse Bidder, the Successful Bidder and the Backup Bidder, are deemed to have agreed that all proceedings in the Bankruptcy Court relating to the Bidding Procedures, the Auction, the relief requested in the Motion or the construction or enforcement of Transaction Documents are core proceedings under 28 U.S.C. § 157; to have waived any right to a jury trial in connection with such disputes; and to have consented to entry of a final order or judgment by the Bankruptcy Court if it is determined that the Court would otherwise lack Article III jurisdiction.

Overbid

• Minimum Bid: with respect to a Bid for Assets subject to the Stalking Horse APA, the Purchase Price must include (1) cash consideration at closing exceeding the aggregate sum of (a) $57.5 million, (b) the Bid Protections in the aggregate amount of $1,725,000, and (c) an initial minimum overbid increment of $1 million (together, the Initial Overbid Amount); and (2) contingent payment rights that, in the Debtors' discretion in consultation with the Consultation Parties, when combined with the Initial Overbid, are in amounts and on payment terms of equal or greater value than those reflected in the Stalking Horse APA. The Debtors may, but are not obligated to, afford greater value to upfront payments at closing than to contingent payment rights.
• Minimum Overbid Increment: $1 million. Bidding at the Auction will begin with the Baseline Bid and continue in minimum increments of at least $1 million, though the Debtors may, in their sole discretion, announce increases or reductions to minimum increments at any time.
• Additional consideration in excess of the Baseline Bid may include cash and/or other non-cash consideration acceptable to the Debtors, with non-cash consideration valued in accordance with the Bid Assessment Criteria.
• Each Overbid must remain open and binding on the Qualified Bidder unless and until the Debtors accept a higher or otherwise better Overbid from another Qualified Bidder and such Overbid is not selected as the Backup Bid.
• A Qualified Bidder (other than the Stalking Horse Bidder) submitting an Overbid must, at the Debtors' request, submit written evidence demonstrating its ability to close at the purchase price contemplated by such Overbid.
• Round-skipping is explicitly prohibited. In each round of bidding, each Qualified Bidder must submit a Bid that is a better offer than the immediately preceding Bid submitted in that round; a Qualified Bidder that fails to do so will be disqualified from continuing to participate in the Auction for such Assets.
• Absent leave from the Bankruptcy Court, any Overbid submitted after the Debtors announce on the record that the Auction is concluded will not constitute a Qualified Bid.

Good Faith Deposit

• Each Bid must be accompanied by a Good Faith Deposit in the form of cash paid via wire transfer, to be held in escrow, in an amount equal to 10% of the Initial Overbid Amount being bid. The Stalking Horse Bidder's Deposit is governed by the Stalking Horse APA and the Deposit Escrow Agreement.
• The Buyer has submitted a good faith deposit of $5.75 million to the Escrow Agent, deposited within two business days of the Execution Date and held in escrow under the Deposit Escrow Agreement. At the Closing, the Debtors and the Buyer are authorized and directed to deliver Joint Written Instructions to the Escrow Agent releasing the Deposit to the Sellers, credited against the Upfront Payment.
• If the Stalking Horse APA is terminated by the Sellers for the Buyer's material breach or for the Buyer's failure to fund at Closing, the Sellers are entitled to the Deposit plus any accrued investment interest as liquidated damages, which the parties agree is not a penalty and which, absent fraud or willful misconduct, is the Sellers' sole and exclusive remedy against the Buyer. On any other termination, the Sellers must deliver Written Instructions to the Escrow Agent within two business days directing return of the Deposit plus accrued investment interest, less any fees or expenses owing to the Escrow Agent, to the Buyer.
• To the extent the purchase price of a Bid is increased at any time, whether prior to or during the Auction, the required Good Faith Deposit automatically increases to 10% of the increased purchase price, and the Potential Bidder must promptly pay the increase into escrow within one business day. The Debtors may condition Auction participation on payment of the full increased deposit prior to commencement of the Auction.
• Following the Conclusion of the Auction, the Successful Bidder and Backup Bidder (other than the Stalking Horse Bidder) must increase their Good Faith Deposits to equal 10% of the cash portion of the Successful Bid or Backup Bid, as applicable.
• All Good Faith Deposits will be held in a non-interest-bearing escrow or trust account. Deposits of Qualified Bidders other than the Successful Bidder and Backup Bidder will be returned within seven days after selection of the Successful Bidder and Backup Bidder; the Backup Bidder's deposit will be returned within seven days after consummation of the sale with the Successful Bidder.
• The Successful Bidder's Good Faith Deposit will be applied to the Purchase Price at closing, and the Debtors will be entitled to retain it as part of their damages if the Successful Bidder fails to close, provided that the Stalking Horse APA governs any forfeiture or return of the Stalking Horse Bidder's deposit.

Qualified Bidder Designation

• A Qualified Bidder is a Potential Bidder that, in the Debtors' sole determination following consultation with the Consultation Parties, (i) has timely submitted a Bid satisfying each of the Bid Requirements and (ii) is able to consummate the proposed transaction within the required timeframe if selected as the Successful Bidder. The Debtors reserve the right to work with any Potential Bidder to cure deficiencies in a Bid not initially deemed a Qualified Bid.
• The Debtors will notify Potential Bidders of their determination no later than one business day prior to the Auction.
• A Qualified Bidder may not modify, amend or withdraw its Qualified Bid without the Debtors' consent, except to increase the purchase price or otherwise improve the terms of the Bid, or, in the case of the Stalking Horse Bidder, pursuant to the terms of the Stalking Horse APA.
• The Debtors may, in their business judgment and in consultation with the Consultation Parties, reject at any time before entry of an order approving a Qualified Bid any Bid (other than the Stalking Horse Bid) that is inadequate or insufficient, not in conformity with the Bankruptcy Code, the Bidding Procedures or the terms and conditions of the Sale, or contrary to the best interests of the Debtors, their estates and their stakeholders.

Auction Details

• If no Qualified Bids other than the Stalking Horse Bid are received by the Bid Deadline, the Auction will be canceled, the Stalking Horse Bidder will be deemed the Successful Bidder and the Stalking Horse APA the Successful Bid, and the Debtors will seek approval of the Stalking Horse APA at the Sale Hearing. The Debtors will file, serve and publish a notice stating the cancellation of the Auction, the deemed Successful Bidder, and the date, time and location of the Sale Hearing.
• If the Debtors receive one or more Qualified Bids from Qualified Bidders other than the Stalking Horse Bidder for all or substantially all of the Assets, or a subset thereof, the Debtors will conduct the Auction in accordance with the Bidding Procedures.
• No later than one business day prior to commencement of the Auction, the Debtors will notify all Qualified Bidders and Consultation Parties in writing of the Baseline Bid — the highest or otherwise best Qualified Bid as determined by the Debtors in their reasonable business judgment following consultation with the Consultation Parties — and provide complete copies of all Transaction Documents supporting the Baseline Bid, subject to exclusion of confidential financial information.
• Bid Assessment Criteria: the Debtors' determination of the Baseline Bid will take into account all factors relevant to the value of a Qualified Bid to the estates, including (a) the number, type and nature of any changes to the Stalking Horse APA requested; (b) the amount and nature of the total consideration; (c) the likelihood of the bidder's ability to close and the timing thereof; (d) the net economic effect of any changes to the value to be received by the estates; (e) the projected percentage recovery to general unsecured creditors and the certainty of such recovery; (f) whether all administrative, priority and secured claims will be paid in full; (g) treatment of employees, vendors, customers and suppliers; and (h) the net benefit to the estates.
• The Auction will be conducted openly and transcribed by a court reporter or recorded. The Debtors and their professionals will direct and preside over the Auction, will describe the terms of the Baseline Bid at the start, and will maintain a transcript of all Bids made and announced, including the Baseline Bid, all Overbids, the Successful Bid and the Backup Bid. All Bids made after the Baseline Bid must be Overbids, will be made and received on an open basis, and all material terms of each Bid will be fully disclosed to all other Qualified Bidders.
• Only a Qualified Bidder that has submitted a Qualified Bid is eligible to participate at the Auction. Authorized representatives of each Qualified Bidder (including the Stalking Horse Bidder) and the Debtors may attend. All Qualified Bidders must attend in person unless the Debtors, in their sole discretion, permit virtual participation. A Qualified Bidder's election not to attend does not affect the enforceability of its Qualified Bid.
• The Debtors may determine that the Auction will be held virtually upon at least three business days' notice to the Sale Notice Parties and all Qualified Bidders, in a manner not inconsistent with the Stalking Horse APA and after consultation with the Consultation Parties. If the Auction is held virtually, the Debtors will provide attendance instructions to participants and other attendees by email, and any change in the date, time or location of the Auction will be noticed to Qualified Bidders and published on the Stretto case website.
• Pursuant to Local Rule 6004-1(c)(ii), parties in interest may attend the Auction, provided they deliver a written request to attend by email to the Debtors' counsel at least one business day prior to the Auction. The Bidding Procedures reserve the Debtors' right to object on an emergency basis to any creditor's proposed attendance. Except as otherwise provided in the Bidding Procedures Order and the Bidding Procedures, Local Rule 6004-1(c)(ii) is waived.
• Each Qualified Bidder must confirm on the record of the Auction that it has not engaged in any collusion with respect to the bidding or the sale of the Assets.
• The Debtors reserve the right, in their sole discretion and in consultation with the Consultation Parties, to conduct the Auction in a manner designed to maximize value based upon the nature and extent of the Qualified Bids received, and may establish a reasonable limit on the number of representatives and/or professional advisors appearing on behalf of a Qualified Bidder.
• Where an Overbid has been accepted in whole or in part because of the addition, deletion or modification of any provision, including the addition or removal of Assets or Assumed Contracts, the Debtors will provide notice to each participant of the value ascribed to such change, as determined by the Debtors in their sole discretion following consultation with the Consultation Parties. After each round of bidding, the Debtors will announce the Leading Bid.

Selection of Successful Bid and Backup Bid

• After announcing the Conclusion of the Auction, the Debtors will determine, after consultation with the Consultation Parties and consistent with the Bidding Procedures and the Bid Assessment Criteria, which Bid constitutes the Successful Bid, and will notify all Qualified Bidders at the Auction of the identity of the Successful Bidder.
• Any determination resulting in the selection of a Successful Bid or Backup Bid other than the Stalking Horse Bid is subject to the prior written consent of the DIP Agent unless the selected bid (i) provides for cash consideration at closing sufficient to pay in full the DIP Obligations and the Remaining Prepetition Secured Obligations and (ii) provides for a closing outside date not materially later than the Outside Date.
• Within 24 hours after the Conclusion of the Auction, the Debtors will file and serve on the Sale Notice Parties a Notice of Successful Bidder identifying the Successful Bidder and Backup Bidder, including either copies or a summary of the material terms of each Successful Bid and Backup Bid (including any contemplated assumption and assignment of contracts) or instructions for accessing them on the claims and noticing agent's website at https://cases.stretto.com/BioXcel, and setting forth the date, time and location of the Sale Hearing.
• The Qualified Bidder submitting the next-highest or otherwise second-best Qualified Bid will be required to serve as Backup Bidder and is deemed to agree to such designation.
• Under Section 5.7.6, as amended and restated by the Bidding Procedures Order, if the Stalking Horse Bidder is not the prevailing party but is the next highest bidder, as determined by the Sellers, it must serve as Backup Bidder. It must keep its bid (as it may be revised at the Auction with its consent) open and irrevocable until the Backup Bid Expiration Date, which is the earlier of (a) the first business day after the closing of a sale transaction with the Successful Bidder and (b) the later of (i) ten days after entry of an order approving a sale to the Successful Bidder and (ii) twenty days after the Auction. If the closing of the sale transaction with the Successful Bidder is terminated before the Backup Bid Expiration Date, the Stalking Horse Bidder is deemed the new Successful Bidder, and the Buyer and the Sellers are obligated to consummate the sale under the Stalking Horse APA.
• The identity and material terms of the Backup Bid will be announced at the Conclusion of the Auction at the same time as the Successful Bidder. The Backup Bid remains binding until the closing of the Sale pursuant to the Successful Bid, except that if the Stalking Horse Bidder serves as Backup Bidder, its Backup Bid remains binding solely to the extent provided in the Stalking Horse APA.
• If a Successful Bidder fails to consummate its Successful Bid, the Debtors may select the Backup Bidder as the Successful Bidder, and will seek Court approval to consummate the Backup Bid with all rights reserved against the defaulting Successful Bidder.
• Presentation of a Qualified Bid to the Court does not constitute acceptance; the Debtors will be deemed to have accepted a Bid only upon Court approval at the Sale Hearing.
• At the Sale Hearing the Debtors will seek findings that the Auction was conducted, and the Successful Bidder selected, in accordance with the Bidding Procedures; that the Auction was fair in substance and procedure; that each Successful Bid was a Qualified Bid; and that consummation of the Sale provides the highest or otherwise best offer for the Assets and is in the best interests of the Debtors and their estates. Upon Court approval, the Successful Bid is deemed accepted and the Debtors are bound to its terms with no further opportunity for an auction or other process.
• If the Successful Bidder or Backup Bidder fails to enter into an asset purchase agreement or consummate the proposed transaction because of a breach or failure to perform, the Debtors reserve the right to seek all available damages, including specific performance and retention of the Good Faith Deposit.

Consultation Parties

• Consultation Parties are the DIP Secured Parties, the Prepetition Secured Parties (each as defined in the operative Financing Order), and any statutory committee appointed in these cases.
• If any Consultation Party, including any member of a statutory committee, submits a bid for any Assets or is a participant in any active or potential Bid, it immediately ceases to be a Consultation Party unless and until it unequivocally revokes its Bid and waives its right to continue as a purchaser or potential purchaser.
• Other than as expressly provided, including with respect to Credit Bidding, neither the Bidding Procedures nor the Bidding Procedures Order limits or alters the rights of the DIP Secured Parties or Prepetition Secured Parties under the operative Financing Order and the other DIP Loan Documents.

Modification of Bidding Procedures

• The Debtors reserve the right, in their reasonable business judgment, consistent with their fiduciary duties and applicable law and in consultation with the Consultation Parties, to modify the Bidding Procedures, waive terms and conditions, extend deadlines or milestones, announce modified or additional Auction procedures, adjourn the Auction or the Sale Hearing without further notice, cancel the Auction or elect not to hold an Auction, and impose additional customary terms and conditions on any Sale.
• Any material modifications, and any modifications affecting the terms and conditions of the Stalking Horse APA, the Bid Protections, or that materially affect the Assets, require the prior written consent of the Stalking Horse Bidder in its sole discretion. The Bidding Procedures may not be amended to increase the Bid Protections.
• All modifications and additional rules will be communicated in advance to the Consultation Parties and Qualified Bidders, including the Stalking Horse Bidder, provided that modifications occurring at the Auction will be disclosed only to those in attendance.
• Except as provided in the Stalking Horse APA, nothing obligates the Debtors to consummate or pursue any transaction with any bidder, and nothing in the Bidding Procedures limits the ability of the Debtors or their Boards of Directors to take, or refrain from taking, any action determined in good faith, after consultation with advisors, to be required to comply with their fiduciary duties.

Assumption and Assignment

• The Debtors will file with the Court and publish on the Stretto case website a Contract Assumption and Assignment Notice, with Schedule 1 listing each contract that potentially could be assumed and assigned in connection with the Sale together with the Debtors' calculation of Cure Amounts. Inclusion of a contract on Schedule 1 does not constitute an admission that such contract is executory or an unexpired lease, nor does it require or guarantee assumption or assignment. Cure Amounts on Schedule 1 will be reduced by any postpetition payments made by the Debtors on account of them, and the Debtors reserve the right to update Schedule 1 by supplemental notice filed with the Court or by written notice to the applicable counterparty.
• Cure Objections, and objections to the potential assumption or assignment of any contract, must be filed with the Court and served on the Notice Parties by Oct. 14, 2026, at 4 p.m. ET. Cure Objections must be in writing and state with specificity the legal and factual bases, the asserted correct Cure Amount, and include supporting documentation.
• Objections to the Stalking Horse Bidder's ability to provide adequate assurance of future performance must be filed with the Court and served on the Notice Parties by the Sale Objection Deadline of Oct. 14, 2026, at 4 p.m. ET. Adequate Assurance Objections with respect to a Successful Bidder other than the Stalking Horse Bidder must be filed with the Court and served on the Notice Parties by 4 p.m. ET on the date that is two business days after service of the Notice of Successful Bidder. In each case, objections must state with specificity the legal and factual bases and include supporting documentation. The Debtors, the Successful Bidder and the objecting counterparty must first confer in good faith; any unresolved Adequate Assurance Objection will be determined at the Sale Hearing. A counterparty that fails to timely object is barred from objecting on adequate assurance grounds, and the Successful Bidder is deemed to have provided adequate assurance of future performance under sections 365(b)(1)(C), 365(f)(2)(B) and, if applicable, 365(b)(3) of the Bankruptcy Code.
• A counterparty that fails to timely file and serve a Cure Objection or objection to assumption and assignment is forever barred from asserting any objection to the cure cost or the assignment, including any demand for additional cure amounts and any assertion that conditions to assumption and assignment under sections 365(b)(1) and 365(c) of the Bankruptcy Code must be satisfied. The cure amounts set forth on Schedule 1 will be controlling and the only amounts necessary to cure outstanding defaults and satisfy section 365(b) of the Bankruptcy Code, and the counterparty will be deemed bound by and to have consented to those cure amounts and to the Sale and the assumption and assignment of the contract.
• The Debtors, the Stalking Horse Bidder or Successful Bidder, and the objecting counterparty must first confer in good faith to resolve a Cure Objection without Court intervention. Unless and until the Cure Costs Cap is exceeded, the Debtors may not settle any Cure Objection relating to a contract to be assumed and assigned to the Stalking Horse Bidder without the Stalking Horse Bidder's prior written consent.
• If a Cure Objection cannot be consensually resolved prior to the Sale Hearing, the Debtors will seek an expedited hearing for the Court to determine the Cure Amounts and approve the assumption and assignment; unresolved Cure Objections may be heard at the Sale Hearing or, at the Debtors' option in consultation with the Consultation Parties and the Successful Bidder, adjourned to a subsequent hearing. Upon resolution of an Adjourned Cure Objection and payment of the applicable cure amount, the contract will, at the election of the Successful Bidder, be deemed assumed and assigned as of the closing date of the Sale.
• If the Debtors and a counterparty cannot resolve a Cure Objection, the contract may nonetheless be assumed and assigned, provided that the Debtors will segregate and reserve from the Sale proceeds the Cure Amount asserted by the counterparty pending resolution.
• If a Cure Objection is resolved in a manner not in the best interest of the Debtors and their estates, the Debtors may determine, to the extent permitted under the purchase agreement, that the affected contract will no longer be assumed and assigned; for unexpired leases of non-residential real property, such determination must be made prior to expiration of the applicable section 365(d)(4) deadline.
• The Stalking Horse APA includes a schedule of Available Contracts. The Buyer may designate in writing any Available Contract to be assumed and assigned to it as a Purchased Contract no later than two business days prior to Closing.
• If a Cure Cost dispute or any other dispute over the assumption or assignment of an Available Contract is unresolved to the Buyer's satisfaction as of two business days prior to Closing, that contract becomes a Disputed Contract and the Buyer's designation deadline is extended for that contract until the earlier of the date it is deemed rejected under section 365 of the Bankruptcy Code and the date the dispute is finally determined by the Bankruptcy Court or consensually resolved with the Buyer's approval. The Buyer then has 10 business days after that period to designate the contract, failing which it will not constitute a Purchased Contract. The proposed Sale Order authorizes the Debtors to assume and assign such contracts after the Closing without further order of the Court, with the same force and effect as if assigned as of the Closing Date.
• Cure Amounts payable by the Stalking Horse Bidder are subject to the $2.5 million Cure Costs Cap, and any excess above the Cure Costs Cap will reduce the Upfront Payment in accordance with the Stalking Horse APA. The Buyer may elect, upon written notice delivered no later than two business days prior to Closing, to satisfy its obligation to pay Cure Costs either by paying the applicable counterparties directly or by providing such funds to the Sellers for disbursement.
• Upon and as of the Closing Date, the Buyer will be deemed substituted for the applicable Debtor as a party to the Purchased Contracts, and the Debtors will be relieved from any further liability thereunder pursuant to section 365(k) of the Bankruptcy Code.

Sale Free and Clear

• The Debtors seek authorization to sell the Assets free and clear of all liens, claims, encumbrances and other interests in accordance with section 363(f) of the Bankruptcy Code, other than Permitted Encumbrances and Assumed Liabilities, with such liens, claims, encumbrances and interests attaching to the net proceeds of the Sale with the same validity, force, effect and priority they had against the Assets, subject to any rights, claims and defenses of the Debtors and their estates.
• Any sale or transfer of the Assets will be on an "as is, where is" basis and without representations or warranties of any kind by the Debtors, their agents or the estates, except as expressly set forth in a final purchase agreement approved by the Court as the Successful Bid.
• The Debtors will present evidence at the Sale Hearing that the Sale satisfies the requirements of section 363(f), which, being written in the disjunctive, requires satisfaction of only one of its five requirements.

Good Faith Purchaser

• The Debtors request that the Sale Order include a provision that any Successful Bidder for the Assets is a "good faith" purchaser within the meaning of section 363(m) of the Bankruptcy Code, noting that any asset purchase agreement executed by a Successful Bidder (including the Stalking Horse APA) will have been negotiated at arm's-length and in good faith, with each party represented by its own advisors and counsel.
• The proposed Sale Order provides that the Buyer has acted in good faith within the meaning of section 363(m), is purchasing the Purchased Assets in good faith and for fair and reasonable consideration, is not an insider of any Debtor, and is entitled to the full rights, benefits, privileges and protections afforded under section 363(m).
• The Stalking Horse APA was negotiated, proposed and entered into without collusion, in good faith and from arm's-length bargaining positions; the Buyer has not acted in a collusive manner, and the purchase price was not controlled by any agreement among bidders.

Successor Liability

• Section 5.7.1 of the Stalking Horse APA requires a finding in the Sale Order that the Buyer is not a successor to, a mere continuation of, or an alter ego of the Debtors or their estates, and that there is no continuity of enterprise or common identity between the Buyer and the Debtors under any theory of law or equity. The Buyer is not holding itself out as a successor to or continuation of the Debtors, and the Sale does not amount to a consolidation, succession, merger or de facto merger.
• Except as otherwise expressly set forth in the Stalking Horse APA or the Sale Order and except with respect to the Assumed Liabilities, the transfer of the Purchased Assets will not subject the Buyer to any liability with respect to the Debtors or the operation of their businesses prior to Closing, including under any theory of successor, vicarious, antitrust, environmental, revenue, pension, ERISA, tax, labor (including any WARN Act), employment or benefits, de facto merger, business continuation, substantial continuity, alter ego, derivative, transferee, veil piercing, escheat, continuity of enterprise, mere continuation, product line, products liability or other applicable law or theory of liability.
• The Buyer will have no liability for the Excluded Liabilities and, except with respect to Permitted Encumbrances and Assumed Liabilities, will not assume or be deemed to assume any liability or obligation of the Debtors, their estates, or any of the Debtors' predecessors or affiliates.
• The Buyer is not a successor to any Debtor for any Tax purpose, and neither the Buyer nor any of its affiliates will have any derivative, successor, transferee or vicarious Tax liability for any Taxes of the Debtors arising, accruing or payable in connection with the operation of the Business prior to Closing. All Persons are barred, estopped and permanently enjoined from commencing or continuing any proceeding against the Buyer or its affiliates to recover any pre-Closing Tax liability of the Debtors.

Tax Matters

• The parties intend that the sale, transfer, assignment and conveyance of the Purchased Assets be entitled to the exemption from all Transfer Taxes available under section 1146(a) of the Bankruptcy Code, and will use commercially reasonable efforts to obtain and give effect to such exemption, including by seeking to reflect it in the Sale Order.
• To the extent any Transfer Taxes are nevertheless imposed, they will be borne and paid 50% by the Buyer and 50% by the Sellers.
• No bulk sales law or similar law of any state or other jurisdiction will apply to the transactions contemplated under the Stalking Horse APA, and the parties intend that the transfer be free and clear of any encumbrances arising out of bulk transfer laws pursuant to section 363(f).

Employee Matters and D&O Tail Coverage

• Section 5.14 of the Stalking Horse APA provides that the Stalking Horse Bidder will identify any employees to whom it intends to make an offer of employment. No later than five business days prior to the Closing Date, the Buyer will offer at-will employment, effective as of the Closing, to those Business Employees it wishes to employ; those who accept and actually commence employment are Continuing Employees.
• The Buyer and its affiliates will not assume any liabilities with respect to any current or former employees or other service providers of the Sellers or their affiliates, or with respect to any Plans or other compensation or benefit plans, programs, arrangements or agreements, except for liabilities with respect to the employment of Continuing Employees arising on and after the date they actually commence employment with the Buyer or its affiliates.
• For Continuing Employees who participate in the Buyer's benefit plans after the Closing, the Buyer will use commercially reasonable efforts to waive pre-existing condition limitations and waiting periods under group health plans for the plan year in which the Closing occurs, credit co-payments and deductibles paid under the corresponding Seller plan during that plan year, and recognize prior service with the Sellers for purposes of eligibility, 401(k) vesting and paid-time-off levels, excluding accruals under any defined benefit pension or retiree welfare plan and subject to customary anti-duplication limits.
• Notwithstanding the terms of any non-competition, non-solicitation, non-disclosure or similar restrictive covenant between a Seller and a Continuing Employee, consultant or vendor, such person will be permitted to provide services to the Buyer and its affiliates following the Closing, and no Seller will seek to enforce any such covenant against the Buyer or its affiliates following the Closing.
• Prior to the Closing, the Sellers will obtain, at their sole expense, a prepaid ("tail") directors' and officers' liability insurance policy covering acts or omissions occurring at or prior to the Closing Date for six years from the Closing Date, covering all current and former directors and officers of the Sellers on terms no less favorable than the policy in effect immediately prior to the Closing Date.

Record Retention

• Under Section 5.11 of the Stalking Horse APA, for a period of three years after the Closing the Buyer will retain all material books and records related to the Purchased Assets, the Assumed Liabilities and the Business, and will, upon reasonable notice, during normal business hours and at the Sellers' expense, provide the Sellers and their affiliates and representatives reasonable access to such books and records to the extent necessary for the preparation of financial statements, in connection with any litigation (expressly excluding litigation against the Buyer, where document production will be governed by rules of discovery), or in connection with the administration of the chapter 11 cases.
• The Buyer is not required to provide access to or disclose information (i) the disclosure of which would violate applicable law, (ii) that in the Buyer's reasonable judgment would result in disclosure of any trade secrets of third parties or violate confidentiality obligations, or (iii) the disclosure of which would cause the loss of any attorney-client, attorney work product or other legal privilege.
• Each Seller retains the right to retain copies of all or any part of the documentation it delivers to the Buyer as may be reasonably necessary to exercise its rights or perform its obligations, for purposes of administering the chapter 11 cases and complying with law.

Closing and Outside Date

• The Closing will take place electronically or at the New York office of Ropes & Gray LLP at 8:00 a.m. local time on the third business day following satisfaction or waiver of all conditions set forth in Article 6 of the Stalking Horse APA (other than those to be satisfied at Closing), or at such other time and place as the parties may mutually agree in writing.
• Outside Date: Oct. 30, 2026, unless otherwise extended by mutual agreement of the Sellers and the Buyer. The Buyer may also terminate earlier upon the Sellers' receipt of a Carve Out Trigger Notice or the termination of the DIP Financing Order (Section 8.1.14), or upon a Final Order granting relief from the automatic stay with respect to any material portion of the Purchased Assets (Section 8.1.11).
• The Debtors are not entering into any interim arrangements with the Stalking Horse Bidder.

Use of Proceeds

• The proceeds of the Sale will be applied at Closing as set forth in the Final DIP Order.

Notice Procedures

• Within three business days of entry of the Bidding Procedures Order, the Debtors will serve the Sale Hearing Notice on the Sale Notice Parties:
  • the U.S. Trustee;
  • the holders of the 30 largest claims or any official committee;
  • the SEC, the IRS and the U.S. Department of Justice;
  • counsel to the DIP Lender Advisors and counsel to the Stalking Horse Bidder;
  • entities known to have expressed a bona fide interest in a transaction for the Assets;
  • entities known to have asserted a lien, claim or encumbrance on the Assets;
  • federal, state and local environmental, regulatory or taxing authorities or recording offices with a reasonably known interest;
  • all counterparties to contracts to be assumed and assigned, or rejected, as part of the Sale; and
  • all parties requesting notice under Bankruptcy Rule 2002.
• On or about the same date, the Debtors will publish the Sale Hearing Notice on the website of their claims and noticing agent, Stretto, and will publish a substantially similar notice once in a national edition of USA Today. The Court found that such notice constitutes good and sufficient notice, and no other or further notice is required.
• The Sale Hearing Notice provides, among other things, the date, time and place of the Auction; the Bidding Procedures and related dates and deadlines; the deadline to object and the date, time and place of the Sale Hearing; reasonably specific identification of the Assets subject to the proposed Sale; instructions for promptly obtaining a copy of the Stalking Horse APA; representations describing the proposed Sale as free and clear of liens, claims, interests and other encumbrances (other than Permitted Encumbrances and Assumed Liabilities), with such interests attaching with the same validity and priority to the Sale proceeds; and the Stalking Horse Bidder's commitment to assume certain liabilities of the Debtors.

Sale Objections

• Objections to the Sale or the other Transactions contemplated under the Stalking Horse APA, including to entry of the Sale Order, must meet the following requirements:
  • be in writing;
  • conform to the Bankruptcy Rules and Local Rules;
  • state with particularity the legal and factual basis and specific grounds for the objection; and
  • be filed with the Court and served on the Notice Parties so as to be actually received by Oct. 14, 2026, at 4 p.m. ET (the Sale Objection Deadline).
• Supplemental Sale Objections are limited solely to (i) the conduct of the Auction, (ii) a proposed Sale other than to the Stalking Horse Bidder, and (iii) the ability of a Successful Bidder other than the Stalking Horse Bidder to provide adequate assurance of future performance. They are due two business days after service of the Notice of Successful Bidder. Objections to the Stalking Horse Bidder's ability to provide adequate assurance of future performance are subject to the Sale Objection Deadline.
• A party's failure to timely object forever bars it from asserting any objection to the Motion, the Sale, the Stalking Horse APA, entry of the Sale Order, the free and clear transfer of the Assets, or the selection of the Successful Bidder or Backup Bidder, including the assumption and assignment of any Assigned Contracts and related Cure Amounts. Such failure constitutes the party's consent to entry of the Sale Order and consummation of the Sale.

Relief from Stay

• The Debtors request a waiver of the 14-day stay periods under Bankruptcy Rules 6004(h) and 6006(d) to permit an immediate closing, noting that it is critical to close the Sale as soon as possible after all closing conditions have been met or waived in order to preserve the value of the estates and limit the costs of administering and preserving the Assets.
• The proposed Sale Order provides that, for cause shown, the order will not be stayed after entry, will be effective and enforceable immediately upon entry, and that the Debtors and Buyer are authorized and empowered to close the Sale immediately upon entry.

Key Dates

• Entry of Bidding Procedures Order: Sept. 28, 2026 [Docket No. 179] (Stalking Horse APA milestone: no later than 30 calendar days after the Petition Date)
• Deadline to Serve Bidding Procedures Order, Sale Hearing Notice and Contract Assumption and Assignment Notice: no later than three business days following entry of the Bidding Procedures Order
• Bid Deadline: Oct. 9, 2026, at 12 p.m. ET
• Deadline to Designate Qualified Bids: Oct. 13, 2026
• Sale Objection and Cure Objection Deadline, including objections to the Stalking Horse Bidder's adequate assurance of future performance: Oct. 14, 2026, at 4 p.m. ET
• Auction (if necessary): Oct. 14, 2026, at 10 a.m. ET, at the offices of Cooley LLP, 55 Hudson Yards, New York, N.Y., or such later time that day or other place, including virtually, as determined by the Debtors (no later than 50 calendar days after the Petition Date under the Stalking Horse APA milestones)
• Deadline to Serve Notice of Successful Bidder and Contract Assumption Notice: within 24 hours after the conclusion of the Auction
• Deadline to File a Supplemental Sale Objection (limited to the conduct of the Auction, a Sale other than to the Stalking Horse Bidder, and the adequate assurance of future performance of a Successful Bidder other than the Stalking Horse Bidder) or an Adequate Assurance Objection with respect to such Successful Bidder: 4 p.m. ET, two business days after service of the Notice of Successful Bidder
• Sale Hearing: Oct. 21, 2026, at 10 a.m. ET, before Judge Thomas M. Horan, 824 North Market Street, 5th Floor, Courtroom No. 7, Wilmington, Del. (no later than 55 calendar days after the Petition Date under the Stalking Horse APA milestones); the Sale Hearing may be adjourned by announcement in open Court or on the Court's calendar without further notice
• Entry of Sale Order: Oct. 21, 2026 (no later than 60 calendar days after the Petition Date under the Stalking Horse APA milestones)
• Closing: Oct. 26, 2026
• Outside Date: Oct. 30, 2026
• FDA target action date for the pending sNDA: Nov. 14, 2026