Madryn Asset Management DFAN14A Additional proxy materials by non-management

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No. )

Filed by the Registrant ☐

Filed by a Party other than the Registrant ☒

Check the appropriate box:

☐	Preliminary Proxy Statement

☐	Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

☐	Definitive Proxy Statement

☒	Definitive Additional Materials

☐	Soliciting Material under §240.14a-12

SomaLogic, Inc.

(Name of Registrant as Specified in its Charter)

Madryn Asset Management, LP

Madryn Health Partners, LP

Madryn Health Partners (Cayman Master), LP

Madryn Health Advisors, LP

Madryn Health Advisors GP, LLC

Madryn Select Opportunities, LP

Madryn Select Advisors, LP

Madryn Select Advisors GP, LLC

Avinash Amin

(Name Of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check all boxes that apply):

☒	No fee required

☐	Fee paid previously with preliminary materials

☐	Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

On January 3, 2024, Madryn Asset Management, LP (collectively with its affiliates, “Madryn”) sent the below email to stockholders in connection with SomaLogic, Inc.’s (“SomaLogic”) special meeting of stockholders (the “Special Meeting”). The email attached a copy of the transcript for the Preliminary Injunction Hearing in Gold v. SomaLogic, C. A. No. 202-1249-SG, a copy of which is attached hereto as Exhibit 1 and incorporated herein by reference.

From: Avinash Amin

Sent: Wednesday, January 3, 2024 7:49 PM

To: [_____]

Subject: SomaLogic

[_____],

the transcript of today’s court proceedings in Delaware has been released. I have attached it. I would refer you to the following:

Page 28: references a deck from PWP, SomaLogic’s bank, indicating the company has time to consider its M&A options. This was not disclosed by the company in its filings;

Pages 33-34: the company acknowledges the inaccuracies of its disclosures around the Casdin recusal;

Page 49: the company says it can’t disclose all the PWP slides. Why can the company not disclose the report made by its own banker to the board?

Page 51: the company claims Madryn has made all this known to shareholders. This is not true—Madryn is still learning about poor, inaccurate disclosures and conflicts at this very moment.

Page 52: the company acknowledges there is little risk to delaying the vote and the deal.

We recognize the hour is late and believe this reflects poor process and governance on this merger proposal. How can shareholders vote without proper disclosure? We continue to strongly urge shareholders to vote AGAINST.

Thanks and have a good evening.

Avi

Avinash Amin, M.D.

Madryn Asset Management, LP

330 Madison, 33^rd Floor

New York, NY 10017

E: [_____]

C: [_____]

IMPORTANT ADDITIONAL INFORMATION

Madryn Asset Management, LP, Madryn Health Partners, LP, Madryn Health Partners (Cayman Master), LP, Madryn Health Advisors, LP, Madryn Health Advisors GP, LLC, Madryn Select Opportunities, LP, Madryn Select Advisors, LP, Madryn Select Advisors GP, LLC and Avinash Amin (collectively, the “Participants”) are participants in the solicitation of proxies from the stockholders of SomaLogic in connection with the Special Meeting. On December 18, 2023, the Participants filed with the U.S. Securities and Exchange Commission (the “SEC”) their definitive proxy statement and accompanying GREEN Proxy Card in connection with their solicitation of proxies from the stockholders of SomaLogic for the Special Meeting. MADRYN STRONGLY ADVISES ALL STOCKHOLDERS OF SOMALOGIC TO READ THE DEFINITIVE PROXY STATEMENT, THE ACCOMPANYING GREEN PROXY CARD AND OTHER DOCUMENTS RELATED TO THE SOLICITATION OF PROXIES BY THE PARTICIPANTS, AS THEY WILL CONTAIN IMPORTANT INFORMATION, INCLUDING ADDITIONAL INFORMATION RELATED TO THE PARTICIPANTS AND THEIR DIRECT OR INDIRECT INTERESTS IN SOMALOGIC, BY SECURITY HOLDINGS OR OTHERWISE. The definitive proxy statement and an accompanying GREEN Proxy Card will be furnished to some or all SomaLogic stockholders and is, along with other relevant documents, publicly available at no charge on the SEC’s website at http://www.sec.gov/. In addition, the Participants will provide copies of the definitive proxy statement without charge, when available, upon request. Requests for copies should be directed to Madryn Asset Management, LP.

Exhibit 1



		1

		IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

		DR. LARRY GOLD and DR. JASON		:
		CLEVELAND, on behalf of themselves and		:
		all similarly situated stockholders		:
		of SomaLogic, Inc.,		:
				:
		Plaintiffs,		:
				:
		v		: C. A. No.
				: 2023-1249-SG
		SOMALOGIC, INC., ELI CASDIN, TROY COX,		:
		KATHY HIBBS, THOMAS CAREY,		:
		TYCHO PETERSON, JASON RYAN,		:
		RICHARD POST, ANN MARGULIES,		:
		ROBERT BARCHI, CASDIN CAPITAL, LLC,		:
		and STANDARD BIOTOOLS INC.,		:
				:
		Defendants.		:

		- - -

		Chancery Courtroom No. 12A
		Leonard L. Williams Justice Center
		500 North King Street
		Wilmington, Delaware
		Wednesday, January 3, 2024
		1:07 p.m.

		- - -

		BEFORE: HON. SAM GLASSCOCK III, Vice Chancellor

		- - -

		PRELIMINARY INJUNCTION HEARING

		- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

		CHANCERY COURT REPORTERS
		New Castle County Courthouse
		500 North King Street - Suite 11400
		Wilmington, Delaware 19801
		(302) 255-0524



		2

1		APPEARANCES:

2		E. WADE HOUSTON, ESQ.
		CHRISTOPHER FITZPATRICK CANNATARO, ESQ.
3		Abrams & Bayliss LLP
		-and-
4		PETER L. WELSH, ESQ.
		of the Massachusetts Bar
5		Ropes & Gray LLP
		for Plaintiffs

6

		T. BRAD DAVEY, ESQ.
7		NICHOLAS D. MOZAL, ESQ.
		MEGAN R. THOMAS, ESQ.
8		Potter, Anderson & Corroon LLP
		-and-
9		CATHERINE D. KEVANE, ESQ.
		of the California Bar
10		Fenwick & West LLP
		for Defendants SomaLogic, Inc. Troy Cox,
11		Kathy Hibbs, Thomas Carey, Tycho Peterson,
		Jason Ryan, Richard Post, Anne Margulies,
12		and Robert Barchi

13

		D. McKINLEY MEASLEY, ESQ.
14		PHILLIP REYTAN, ESQ.
		ERIC S. KLINGER- WILENSKY, ESQ.
15		Morris, Nichols, Arsht & Tunnell LLP
		Mintz, Levin, Cohn, Ferris, Glovsky and Popeo,
16		P. C.
		for Defendant Standard BioTools Inc.

17

18		RAYMOND J. DiCAMILLO, ESQ.
		NOAH H. BROWN, ESQ.
19		Richards, Layton & Finger, P.A.
		for Defendants Eli Casdin and
20		Casdin Capital, LLC

21

22		- - -

23

24


		CHANCERY COURT REPORTERS



		3

1		THE COURT: Good afternoon, and happy

2		new year.

3		ATTORNEY DAVEY: Good afternoon,

4		Your Honor. Brad Davey, Potter, Anderson & Corroon.

5		We’re going to do some introductions before turning

6		the mic over to the plaintiffs.

7		THE COURT: That would be appropriate.

8		ATTORNEY DAVEY: I’m here on behalf of

9		SomaLogic and the individual directors other than

10		Mr. Casdin.

11		With me at counsel’s table is my

12		colleague from Fenwick & West, Catherine Kevane; my

13		colleague Nick Mozal; and my colleague Megan Thomas.

14		I should note that I’m also able, for

15		the first time, to introduce Mr. Mozal as my partner.

16		We are very, very pleased to have him. He was

17		well-trained by your colleague, Vice Chancellor Zurn,

18		and we’re happy to have him here as a partner.

19		THE COURT: That’s wonderful.

20		Congratulations.

21		ATTORNEY MOZAL: Thank you,

22		Your Honor.

23		THE COURT: Good afternoon.

24		ATTORNEY DiCAMILLO: Good afternoon,


		CHANCERY COURT REPORTERS



		4

1		Your Honor. Happy new year.

2		Ray DiCamillo for Eli Casdin and

3		Casdin Capital. Here with me this afternoon from my

4		office, Noah Brown.

5		THE COURT: Welcome.

6		ATTORNEY MEASLEY: Good afternoon,

7		Your Honor.

8		THE COURT: Good afternoon.

9		ATTORNEY MEASLEY: Mac Measley from

10		Morris Nichols on behalf of Standard BioTools. With

11		me is my colleague, Phil Reytan.

12		THE COURT: Welcome.

13		ATTORNEY MEASLEY: We even dragged

14		along Mr. Eric Klinger-Wilensky.

15		THE COURT: Thank you.

16		Good afternoon.

17		ATTORNEY HOUSTON: Good afternoon,

18		Your Honor. Wade Houston and Chris Cannataro from

19		Abrams & Bayliss --

20		THE COURT: Pleasure to see you.

21		ATTORNEY HOUSTON: -- for the

22		plaintiffs, and Peter Welsh from Ropes & Gray.

23		THE COURT: Welcome, Mr. Welsh.

24		ATTORNEY WELSH: Good afternoon,


		CHANCERY COURT REPORTERS



		5

1		Your Honor. Thank you.

2		ATTORNEY HOUSTON: With Your Honor’s

3		permission, I’ll give Mr. Welsh the mic.

4		THE COURT: That’s fine. I’m happy to

5		hear it.

6		ATTORNEY WELSH: Good afternoon,

7		Your Honor.

8		First of all, let me thank Your Honor

9		for accommodating us so soon after the new year on

10		this schedule. I think it’s not how any of us would

11		have chosen to spend the year-end holidays. We

12		greatly appreciate it.

13		THE COURT: Well, you’ve kept me

14		somewhat busy over the last few days, but I suspect

15		it’s nothing compared to the effort that has been put

16		in by the attorneys.

17		So I appreciate your taking time out

18		of your families’ schedules to create a record for me

19		here today.

20		ATTORNEY WELSH: Appreciate that,

21		Your Honor. It has been a busy holiday season for all

22		of us. And thank you also, Your Honor, for

23		accommodating us up here in Wilmington. That

24		certainly made it easier for all of us.


		CHANCERY COURT REPORTERS



		6

1		Your Honor, I’d like to begin, if I

2		may, by handing up some materials to the Court --

3		THE COURT: You may.

4		ATTORNEY WELSH: -- that I intend to

5		start my presentation with. These materials have been

6		provided to defendants and the relevant third parties.

7		Your Honor, what’s been handed up is

8		excerpts from the merger proxy, both the original

9		merger proxy and the supplemental merger proxy filed

10		on December, I believe, 21st, and an excerpt from an

11		affidavit submitted in the case by Dr. Roy Smythe, who

12		is the former CEO of SomaLogic.

13		And then lastly is a slide from a

14		PowerPoint deck or a brochure of some sort that

15		SomaLogic disseminated to stockholders this morning,

16		Your Honor. And I’d like to begin with this because

17		it goes to a key alleged misrepresentation in our

18		case, and it’s also relevant breaking news,

19		Your Honor.

20		A key material misrepresentation that

21		we challenged in our motion is the company’s

22		representation that Eli Casdin, board member of

23		SomaLogic and the principal of Casdin Capital, who’s

24		also a significant stockholder, and Eli Casdin is a


		CHANCERY COURT REPORTERS



		7

1		director at Standard BioTools, the counterparty in the

2		proposed deal. The representation that Mr. Casdin is

3		a board member of SomaLogic recused himself from “any

4		discussions” and from all “deliberations related to

5		Standard during Transaction Committee or Board

6		meetings prior to June 16 [of] 2023.”

7		The key allegation in our complaint in

8		this action is that during the penultimate effort to

9		pursue a SomaLogic Standard merger in 2002 that

10		ultimately failed and that we allege led to the board

11		reset that occurred in March of ‘23 to install new

12		directors who were loyal to, beholden to, and willing

13		to act in the interest of Mr. Casdin and Casdin

14		Capital, that Mr. Casdin did not recuse himself during

15		that 2022 process.

16		To moot that claim that Mr. Casdin did

17		not recuse himself from the 2022 process, the company

18		made two supplemental disclosures in the amended

19		proxy. Those supplemental disclosures are in the

20		second page of the demonstrative that has been

21		provided to Your Honor.

22		In the first of those disclosures, the

23		company said that “Eli Casdin served on the SomaLogic

24		Transaction Committee during this period” -- and “this


		CHANCERY COURT REPORTERS



		8

1		period” refers to the 2022 period -- “(and until

2		SomaLogic received the June 16 Proposal, as

3		defined[]), but recused himself from any discussions

4		related to Standard BioTools.”

5		The second supplemental disclosure at

6		the bottom of the second page, also referring to the

7		2022 process, says, “Eli Casdin recused himself from

8		all deliberations of the SomaLogic Transaction

9		Committee related to Standard BioTools during this

10		period. ”

11		Dr. Smythe, who was then both the CEO

12		of SomaLogic and also a member of the 2022 transaction

13		committee, submitted sworn testimony in this case,

14		Your Honor, in which he says at paragraph 16 of his

15		affidavit, “Mr. Casdin did not willingly recuse

16		himself from any Board or Transaction Committee

17		meetings that involved a discussion regarding a

18		potential transaction Standard, even while the

19		Transaction Committee was exploring [the] potential

20		transaction with Standard; indeed, he recused himself

21		from only one meeting -- in which diligence of

22		Standard was discussed, and then only at the

23		insistence of SomaLogic’s General Counsel. ”

24		So Mr. -- I’m sorry. Dr. Smythe’s


		CHANCERY COURT REPORTERS



		9

1		sworn testimony is directly contrary to the

2		supplemental disclosures contained in the company’s

3		operative merger proxy.

4		Dr. Smythe’s sworn testimony is also

5		unrebutted by the defendants in this case. The

6		defendants have submitted no evidence that contradicts

7		Dr. Smythe’s testimony with respect to Mr. Casdin’s

8		recusal during the 2022 process. They’ve, in fact,

9		withheld from us documents we sought under our books

10		and records request covering the period during which

11		the 2022 process played out and have denied us access

12		to board minutes, committee minutes, board books,

13		other materials, formal board materials relating to

14		that time period. They have submitted no affidavit

15		that contradicts Dr. Smythe’s testimony. They didn’t

16		seek to depose Dr. Smythe to test the veracity of his

17		statements. So Dr. Smythe’s testimony on this point

18		is entirely unrebutted by the evidence before

19		Your Honor at this stage in the proceedings.

20		The “breaking news” part of it,

21		Your Honor, is yesterday the company filed a press

22		release, and this morning they reduced the press

23		release to this snazzy slide, brochure, whatever, that

24		is the fourth page of what’s been handed to


		CHANCERY COURT REPORTERS



		10

1		Your Honor.

2		And this is the company’s advocacy

3		piece currently for stockholders to vote in favor of

4		the merger. And it says, “Calling All SomaLogic

5		Stockholders.

6		“Vote ‘FOR’ [] [the] Merger ....”

7		And then it gives on a left-hand side

8		the benefits of the proposed combination with Standard

9		BioTools, and on the right side it gives the company’s

10		version of the “Independent [] Deliberative Board

11		Process” that was supposedly followed here.

12		And you’ll see, Your Honor, we’ve

13		highlighted at the fourth bullet on the right-hand

14		side, reads, “The Board conducted an independent

15		review. An independent board member, who also has an

16		investment in Standard BioTools, was recused from all

17		discussions regarding the potential transaction with

18		Standard BioTools. “ And “all” is highlighted, and

19		that’s the company’s highlighting in this report.

20		I’ll note, Your Honor, that the

21		independent board member, we believe, is Mr. Casdin;

22		but consistent with the broader tenor of the

23		disclosures here, it’s vague on that. And we’re

24		pretty sure they’re referring to Mr. Casdin here,


		CHANCERY COURT REPORTERS



		11

1		which is also an odd way to refer to Mr. Casdin in

2		connection with this merger transaction as a,

3		quote/unquote, independent board member.

4		But this -- the reason we’ve presented

5		this to Your Honor as breaking news is this, I think,

6		clearly demonstrates the materiality of this fact and

7		the materiality of the company’s representations with

8		respect to Mr. Casdin’s recusal. It’s one of only

9		four reasons the company is recommending to

10		stockholders on a process basis that they approve the

11		transaction. And based on the unrebutted affidavit of

12		Dr. Smythe, it’s clearly false.

13		Your Honor, we submit on the basis of

14		this claim alone, we have shown a substantial

15		likelihood of success on the merits on a material

16		disclosure violation in the company’s merger proxy.

17		Your Honor, from the beginning of this

18		case, plaintiffs have pursued this action on the

19		theory that, after two unsuccessful attempts to

20		improperly force a merger of SomaLogic and Standard,

21		including during the 2022 process I just referenced,

22		defendant Casdin Capital and Eli Casdin orchestrated

23		the removal of three directors who opposed the deal

24		and were independent of Eli Casdin, and also not


		CHANCERY COURT REPORTERS



		12

1		viewed by Casdin as sufficiently loyal to Casdin, and

2		that Casdin, using his role at the nom & gov committee

3		and using his co-director, Troy Cox, with whom he has

4		longstanding historical, thick financial and

5		professional relationships, stacked the board with new

6		directors who also have longstanding affiliations with

7		Casdin and economic ties to Casdin, and that he did

8		that in order that those four directors, three of whom

9		went on to the transaction committee in March of 2023,

10		would pursue the merger between SomaLogic and

11		Standard.

12		These so-called board reset

13		allegations were at the hard core of the so-called

14		director claim alleged in our complaint in our opening

15		brief and in our reply brief on the motion to

16		expedite, and they’re a focus for our motion for

17		preliminary injunction here as well. Your Honor, just

18		a few cites in the complaint.

19		These facts are alleged at paragraphs

20		20 through 24, paragraph 31, paragraph 45, paragraphs

21		46 through 47, 48, 51 through 52, and 64.

22		On the motion to expedite this core

23		director claim, including the board reset, is

24		addressed at paragraph 7, 14 through 19, 34 through


		CHANCERY COURT REPORTERS



		13

1		35, and then on our reply brief on the motion to

2		expedite to paragraphs 2, 13, and 15.

3		I raise this, Your Honor, because the

4		defendants have made the point that this is a

5		constantly shifting disclosure claim that we’ve

6		raised, and it’s not.

7		This issue on the board recusal point

8		goes back to the very beginning of our complaint, has

9		been at the core of our efforts to expedite and seek

10		to enjoin this transaction on the basis of the

11		misleading disclosures.

12		Paragraphs 14 through 15 of our

13		opening brief on the motion to expedite capture the

14		relevant factual allegations. There we noted that in

15		early 2022, Casdin commenced efforts to merge

16		SomaLogic with Standard. Casdin served both on the

17		Standard special committee and SomaLogic transaction

18		committee.

19		During this period, Dr. Roy Smythe

20		served as SomaLogic’s CEO and opposed the merger with

21		Standard. After two unsuccessful rounds of merger

22		discussions with Standard lasting through fall of

23		2022, Casdin told Smythe that their business

24		relationship was over and that Smythe should no longer


		CHANCERY COURT REPORTERS



		14

1		expect Casdin’s support as CEO.

2		On March of 20 -- March 28, 2023,

3		SomaLogic announced the resignation of Smythe as CEO

4		and as a member of the board; the, quote/unquote,

5		“retirement of two independent Board members

6		(including at least one strong opponent of merging

7		with Standard), and the appointment of four new Board

8		members: defendants Carey, Ryan, Peterson, and

9		Hibbs “ That’s from our motion to expedite,

10		Your Honor, back in December.

11		And these core factual allegations

12		support the inference, we believe, of a breach of

13		fiduciary duty of loyalty by the director defendants,

14		including Defendants Casdin and Cox, in orchestrating

15		the removal of the prior directors and installing

16		directors loyal to Casdin.

17		At the time we filed our complaint and

18		motion to expedite, little did we know, Your Honor,

19		how bad the facts were. Since the hearing on our

20		motion to expedite, plaintiffs were able to talk with

21		the former CEO of SomaLogic, Dr. Smythe. And

22		Dr. Smythe told us he was willing to provide an

23		affidavit, which we filed in support of the pending

24		motion for a preliminary injunction.


		CHANCERY COURT REPORTERS



		15

1		In his affidavit, Dr. Smythe states

2		that in 2022, the board created a transaction

3		committee in part to review a potential merger with

4		Standard that Casdin was advocating for. Smythe and

5		the initial transaction committee did not believe a

6		merger with Standard was in the company’s best

7		interests.

8		Far from being recused as stated in

9		the company’s disclosures, Casdin was an active

10		participant in transaction committee meetings during

11		deliberations over a transaction with Standard. And

12		the prior transaction committee, after deliberations

13		and after diligence on Standard, formally voted to

14		reject pursuing a merger with Standard. That’s all in

15		the Smythe affidavit.

16		Dr. Smythe further testified in his

17		affidavit that his opposition to a Standard merger led

18		Casdin to target him and undermine him because of his

19		lack of support for the merger. Thereafter, Cox --

20		Defendant Cox, as executive chair of the board,

21		demanded that Smythe resign as CEO and as a member of

22		the board.

23		Two other independent directors,

24		Messrs. Willis and Meisel, similarly posed a Standard


		CHANCERY COURT REPORTERS



		16

1		transaction, according to Dr. Smythe. Like

2		Dr. Smythe, Lillis and Meisel left the board at the

3		exact same time as Dr. Smythe, March of ‘23, because

4		of their unwillingness to support Casdin’s pursuit of

5		a merger with Standard.

6		Critically, Your Honor, none of these

7		facts have been disclosed to the company’s

8		stockholders. Equally critical, Smythe’s testimony is

9		entirely --

10		THE COURT: Some of them have been

11		disclosed.

12		ATTORNEY WELSH: The key facts --

13		sorry.

14		THE COURT: Their leaving the board

15		has been disclosed. Cox’s resignation was disclosed,

16		I believe.

17		What’s not been disclosed is your

18		theory that is supported by the affidavit, admittedly,

19		that there’s a relationship between their rejection of

20		a transaction in 2022 and their resignation with the

21		board; correct?

22		ATTORNEY WELSH: I would say to reduce

23		it to factual matters, Your Honor, what’s not been

24		disclosed is that the company’s CEO, board member, and


		CHANCERY COURT REPORTERS



		17

1		a member of the transaction committee and two

2		independent director members of the transaction

3		committee opposed a merger with Standard in 2022 and

4		took a formal vote to terminate the process of

5		pursuing a merger with Standard in 2022.

6		So just to try and distill it down to

7		basic facts, we think that’s purely factual

8		information. And that factual information -- key

9		factual information has not been disclosed in the

10		merger proxy. The other key factual -- piece of

11		factual information that has not been disclosed in the

12		merger proxy is that Defendant Cox demanded the

13		resignation of CEO Smythe as CEO and a member of the

14		board.

15		THE COURT: I said “Cox” a minute ago.

16		I meant “Smythe.”

17		ATTORNEY WELSH: You did mean

18		“Smythe.” I understood who you were referring to

19		before, Your Honor.

20		Yeah, so Dr. Cox -- or Defendant

21		Cox -- Defendant Cox demanded the resignation of

22		Dr. Smythe after the transaction committee voted to

23		terminate the pursuit of the Standard deal and because

24		of Dr. Smythe’s opposition to the Standard deal.


		CHANCERY COURT REPORTERS



		18

1		And Dr. Smythe also testifies that he

2		infers that Director Lillis and Director Meisel

3		resigned in March of 2023 because of their

4		unwillingness to serve based on their opposition to

5		the merger and Casdin’s relentless advocacy and

6		pressure for the merger.

7		As I mentioned before, Your Honor,

8		Smythe’s testimony is entirely unrebutted by

9		defendants. I won’t go over it again. There are

10		documents. There’s no testimony. They didn’t depose

11		him to challenge the veracity of the statements. That

12		affidavit stands uncontested, we think, under -- we’ve

13		cited Grand Metro v. Pillsbury, Greene v. Dunhill,

14		that an uncontested affidavit at this stage in the

15		proceedings -- and, also, Greene v. Dunhill was a

16		summary judgment decision. An uncontested affidavit

17		is entitled to deference and entitled to credibility,

18		and that’s what we submit -- this case with

19		Dr. Smythe’s affidavit here.

20		And, also, Your Honor, citing

21		Smith v. Van Gorkom, if there were evidence rebutting

22		Dr. Smythe’s testimony, we would have expected the

23		company to come forward with that evidence at this

24		point, and it hasn’t.


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		19

1		The absence of any evidence rebutting

2		Smythe’s testimony supports only one of two

3		inferences. In our view, Your Honor, there is no

4		evidence; or the evidence is adverse to defendants’

5		case. In either case, Smythe’s uncontested affidavit

6		should be fully credited at this stage by the Court,

7		we submit, respectfully, Your Honor.

8		The Smythe affidavit, we’ve covered

9		this a little bit, but it does demonstrate, we

10		believe, six misrepresentations. The first is the

11		Casdin recusal from the 2022 misrepresentation, again,

12		clearly material based on the company’s proxy

13		materials today; and then the Smythe/Willis/Meisel

14		opposition to the transaction, their formal vote to

15		terminate pursuit of the transaction; and their

16		departure from the company following their opposition

17		to the transaction. Those facts, we believe, need to

18		be disclosed, both as a matter of Delaware law and

19		we’ve also cited to Section 502 of Item 8- K under the

20		federal securities laws.

21		Your Honor, under the Securities and

22		Exchange Act, when a director leaves based on a

23		disagreement with the company, the company is

24		obligated under Item 8-K to disclose the nature of


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		20

1		that disagreement, and that didn’t happen here in the

2		case of Dr. Smythe or Messrs. Willis or Meisel.

3		I’ll turn now to the director

4		independence claims, Your Honor, which those focus on,

5		as Your Honor may recall, whether the new directors

6		coming on the board and Defendant Cox, who was on the

7		board, properly disclosed to the other board members

8		their relationships with Mr. Casdin and Casdin

9		Capital.

10		And, Your Honor, it’s clear now from

11		the supplemental proxy, it’s clear now from the board

12		materials and minutes that we’ve reviewed, and it’s

13		also clear now from Defendant Ryan’s testimony that

14		the directors did not disclose their relationships

15		with, interests in, and ties to Mr. Casdin,

16		Casdin Capital, and its affiliated companies until a

17		meeting on October 1st of this year.

18		So at no time when they joined the

19		board in March of 2023 and at no time they joined the

20		transaction committee was there a disclosure that we

21		have these relationships with Eli Casdin. In the case

22		of Defendant Ryan, he was leaving a full-time

23		executive chair position as GeneDx. He went to sort

24		of part time at GeneDx as executive chair making over


		CHANCERY COURT REPORTERS



		21

1		$3 million in compensation while Mr. Casdin was on the

2		comp committee of GeneDx.

3		He went over to SomaLogic to become

4		the executive chair, at SomaLogic to make compensation

5		in excess of $ 2 million. And he didn’t disclose to

6		his fellow directors that he had a prior relationship

7		with Mr. Casdin involving a multi-million-dollar

8		executive chair position at a company that Casdin was

9		an investor in, was on the board of, and was on the

10		comp committee on -- while Ryan was serving as

11		executive chair. None of that was disclosed at the

12		beginning of the process.

13		Similarly, Mr. Cox’s $1 million

14		investment in Casdin Capital, Cox, who’s represented

15		to be an independent director, actually had an

16		investment of a million dollars in Eli Casdin’s firm.

17		It’s unclear whether that was in a fund of Casdin

18		Capital or in the general partner or management

19		company of Casdin Capital. If it was in a fund, it’s

20		unclear whether it was in a fund that held the

21		Standard investment or a different fund. Whatever the

22		case may be, that million-dollar investment by

23		Troy Cox in Casdin’s business was not disclosed to the

24		board until October 1 of 2023.


		CHANCERY COURT REPORTERS



		22

1		And, by the way, the only reason the

2		disclosures occurred on October 1 of 2023 is because

3		our client sent a letter on September 30 to the

4		company saying we understand there may be a

5		consideration -- a transaction under consideration

6		involving Standard, and you should be aware that we

7		know of some potential conflicts involving these

8		directors and Eli Casdin, not all of the conflicts

9		that have now been disclosed, but some of them, and

10		that clearly triggered this discussion at the

11		October 1 board meeting of the various directors’

12		interests in Casdin Capital.

13		That discussion, however, is entirely

14		opaque, at least as far as formal board materials are

15		concerned. Defendant Ryan testified at his deposition

16		that full disclosure was made by all these directors

17		at a roundtable discussion where they all went around

18		the table and disclosed their interests.

19		But Ryan subsequently admitted he

20		didn’t disclose the $ 3.2 million executive chair

21		position he had at GeneDx. And the way Defendant Ryan

22		talks about his relationships with Casdin in the

23		course of his deposition testimony doesn’t inspire

24		confidence that he was fulsome in his disclosure of


		CHANCERY COURT REPORTERS



		23

1		conflicts with Casdin. At 46, lines 9 through 16 of

2		his transcripts, he said he doesn’t recall, quote,

3		disclosing to other board members that I was on

4		another public company board with Eli Casdin, end

5		quote.

6		That doesn’t begin to capture the

7		potential interest that Mr. Ryan has with Mr. Casdin.

8		I think we’ve spent some time on the

9		motion to expedite. On the director independence

10		issue, I think the facts we’ve been able to develop

11		since then only serve to confirm that the proxy is

12		materially misleading with respect to when disclosures

13		were made to the board of the conflicted interests

14		with Casdin.

15		And, in particular, the merger proxy

16		obfuscates whether disclosures were made at the

17		beginning of the process, at the time the transaction

18		committee members were identified as independent for

19		purposes of working on the transaction.

20		And the merger proxy is false and

21		misleading with respect to the disclosures made on

22		October 1 because what the merger proxy says is on

23		October 1, the directors disclosed all of the above

24		interests. And the “above interests” include


		CHANCERY COURT REPORTERS



		24

1		Mr. Ryan’s executive chair position and compensation

2		at GeneDx. And Defendant Ryan confirmed in his

3		deposition that that hadn’t been disclosed at the

4		October 1 meeting of the board.

5		Unless Your Honor has questions, I’ll

6		pivot to the LRP and Perella Weinberg nondisclosures.

7		THE COURT: That’s fine.

8		ATTORNEY WELSH: So there is a very

9		material misrepresentation in the merger proxy

10		concerning the June 6 LRP. We also believe that the

11		misrepresentation concerning the LRP and the proxy is

12		related to the transaction committee’s formal

13		rejection of the proposed merger with Standard at the

14		end of the 2022 process, and I’ll explain that.

15		The LRP representation in the proxy is

16		twofold.

17		First, the proxy -- I’m sorry.

18		The LRP misrepresented --

19		misrepresentation claim in the proxy is twofold.

20		First, the proxy omits the June 6 LRP,

21		and we think that’s a material omission for two

22		reasons.

23		And Your Honor may or may not recall

24		from the motion to expedite argument, there was a


		CHANCERY COURT REPORTERS



		25

1		meeting on June 6 of the directors at which BCG and

2		Mr. Taich, I believe, walked through an existing LRP

3		that the company had.

4		And then at a subsequent meeting on

5		July 11, the board walks through a proposed new LRP

6		and contrasts the proposed new LRP to a prior LRP.

7		That prior LRP, the June 6 LRP, is not disclosed in

8		the merger proxy. And we believe it should be

9		disclosed in the merger proxy for two reasons.

10		One, the June 6 -- sorry.

11		The July 11 board minutes talk about

12		that prior LRP as a prior LRP developed by management

13		and approved by the board. That’s literally the

14		language from the July 11 minutes. So we read that to

15		mean the June 6 LRP, the LRP that was discussed at the

16		June 6 meeting, was the company’s operative LRP at the

17		beginning of the 2023 process. And that LRP changed

18		over the course of the process. And we think it’s

19		very important for stockholders to see management and

20		the board’s operative LRP at the very beginning of

21		this process.

22		The second reason why we think that

23		June 6 LRP is material is if you look at the deck that

24		was presented to the transaction committee and to the


		CHANCERY COURT REPORTERS



		26

1		board in June of this year, there’s a deck prepared by

2		Perella Weinberg where Perella Weinberg walks through,

3		basically, stand-alone scenarios for the company.

4		And it’s clearly Perella Weinberg

5		advising the transaction committee and advising the

6		board on the company’s potential on a stand-alone

7		basis to thrive and get to cash flow breakeven, EBITDA

8		breakeven, and positive net income.

9		And if you look at Slides 7 and 8,

10		this is Exhibit 6 to our motion, Your Honor. And if

11		you look at Slides 7 and 8 of that deck, there are

12		different scenarios modeled by Perella Weinberg of

13		potential revenue forecasts, expense forecasts, EBITDA

14		forecasts, and the like. It’s a grid of different

15		graphs showing the company’s prospects, and those

16		scenarios are all modeled off of and keyed off of the

17		management status quo plan. And the management

18		status quo plan, according to the source and the

19		notation on Slides 7 and 8, is management’s

20		projections, which, again, we take to be the June 6

21		projections.

22		So all of these scenarios that

23		Perella Weinberg is doing to model stand-alone options

24		for the company relative to -- and this is after, by


		CHANCERY COURT REPORTERS



		27

1		the way, Standard has reached out to the company in

2		April to propose re-engaging in merger discussions.

3		This stand- alone analysis that Perella Weinberg does

4		is keyed off of the company’s June 6 LRP.

5		Slide 11 at Exhibit 6 is where PWP

6		summarizes the significance of this modeling exercise.

7		And what that slide clearly shows is that under none

8		of the circumstances does the company achieve

9		near-term breakeven on cash flow EBITDA or income.

10		What the presentation, which was given

11		to the transaction committee and the board in June,

12		frames up, Your Honor, is what’s called the dilemma in

13		the merger proxy between cutting expenses and getting

14		to cash flow even -- that’s one priority, according to

15		the merger proxy -- versus growing revenue on the

16		other hand.

17		And what Slide 11 shows, if you look

18		at Slide 11 of the proxy -- and you can look at it now

19		or Your Honor can look at it later -- it shows none of

20		the scenarios achieve near-term breakeven. Right?

21		They all have different growth prospects. None of

22		them achieve cash flow breakeven.

23		So the company’s narrative is we’re

24		under an urgent, dire situation. This is


		CHANCERY COURT REPORTERS



		28

1		Defendant Ryan’s testimony. Defendants make much of

2		this in their opposition to our PI. We’re under an

3		urgent, dire situation to cut cash, and we were trying

4		to slash expenses. And what the LRP shows is really

5		what you’re doing is just suppressing revenue growth

6		by cutting expenses. Right? And the company

7		recognized that, and so there’s this trade-off.

8		Right?

9		And so what PWP then advises -- and

10		this is the second reason why the LRP’s material is --

11		because PWP’s advice, based on the LRP, is also

12		material. And PWP’s advice, based on the LRP, was

13		that the company has at least three years of cash.

14		It’s not burning cash at an alarming rate or a

15		concerning rate.

16		I mean, this is a biopharma company,

17		which by nature burns cash until you get to a level of

18		growth that generates positive cash flow. And the

19		company should be in no hurry to transact, and time is

20		on its side. And it can be deliberative and patient

21		about how it goes about pursuing M&A.

22		So this June deck that Perella

23		Weinberg prepared and presented to the committee and

24		the board shows that based on the June 6 LRPs, there’s


		CHANCERY COURT REPORTERS



		29

1		a viable path forward for the company and a viable

2		path forward for the company to achieve a higher level

3		of growth than what management ultimately steered the

4		LRPs to in June and August of 2023.

5		So, again, we think, Your Honor, the

6		LRPs approved by the board, management’s LRP, relied

7		on by Perella Weinberg, that June 6 LRP should be

8		disclosed to stockholders. And we think Perella

9		Weinberg’s advice that the company has plenty of

10		runway and can be deliberative and patient about

11		exploring M&A also should be disclosed to

12		stockholders.

13		And I’ll note in the complaint, the

14		public version of the complaint, the only redaction in

15		the public version of the complaint is that advice

16		from Perella Weinberg, that the company can be

17		deliberative and patient about pursuing M&A and has

18		plenty of time.

19		So that, Your Honor, is the LRP claim.

20		And, again, we think that’s clearly material under

21		various management projection case law here.

22		I can turn to irreparable harm/balance

23		of the equities, Your Honor.

24		THE COURT: No.


		CHANCERY COURT REPORTERS



		30

1		ATTORNEY WELSH: Even the defendants

2		tie back to the likelihood of success on the merits

3		prong.

4		THE COURT: Well, in a disclosure

5		claim, the likelihood of success on the merits

6		necessarily determines irreparable harm. As far as

7		the balance of the equities, you can hold whatever you

8		want to say until I hear from the other side as to the

9		real possibility or not of a loss of the deal in the

10		face of an injunction.

11		ATTORNEY WELSH: Yeah, and I’ll just

12		quickly hit on that, and then I’ll yield the podium to

13		Mr. Davey. This is a disclosure case. We’re not

14		trying to join on process grounds. We’re not looking

15		for a long- term injunction to prevent the deal from

16		closing.

17		We’re seeking a preliminary injunction

18		to either facilitate disclosures or have a near-term

19		evidentiary process of some sort to get to a

20		conclusion as to whether the disclosures are accurate

21		or not.

22		And on the bond, Your Honor, we think

23		for those reasons that a nominal bond is appropriate

24		here.


		CHANCERY COURT REPORTERS



		31

1		THE COURT: I don’t need to hear the

2		bond issue either.

3		ATTORNEY WELSH: Great. With that,

4		Your Honor, I’ll yield the podium to Mr. Davey.

5		THE COURT: All right. Thank you for

6		your presentation.

7		ATTORNEY WELSH: Thank you,

8		Your Honor.

9		THE COURT: Whenever you’re ready.

10		ATTORNEY DAVEY: Thank you,

11		Your Honor. Good afternoon again, and I certainly

12		want to join Mr. Welsh in thanking you and your clerks

13		for coming to us in New Castle County. We’re always

14		happy to go to Georgetown.

15		But on a morning like this, it was

16		very helpful to have a couple more hours to try to get

17		ready.

18		THE COURT: Well, I would say it’s

19		always a pleasure to come to Wilmington, but it’s too

20		early in the year to start lying today. But it

21		actually is a pleasure to come up and see my

22		colleagues, and I’m happy I could accommodate you.

23		ATTORNEY DAVEY: Well, thank you very

24		much.


		CHANCERY COURT REPORTERS



		32

1		I’m going to start by continuing to

2		make a couple, probably about four overarching

3		comments before getting into where the disclosures

4		are.

5		I think, as the Court probably has now

6		recognized, this is no longer a narrow proceeding to

7		address what we thought was a narrow claim that

8		Your Honor expedited and thought was on the knife’s

9		edge of colorability; and that is the disclosures

10		regarding the business relationships with Mr. Casdin.

11		We’re now dealing with discovery and

12		new theories that are about something that is far

13		afield from that, and I think in that bucket we have

14		these 2022 process claims. We also have claims about

15		the composition of the board stocks. Right? We’re

16		far afield.

17		THE COURT: I’ve not heard those

18		today, and I think I made it clear that I thought

19		those were probably out of bounds for a hearing. So I

20		appreciate not having them aired.

21		I’ve really heard three fairly narrow

22		claims today. I think that may differ somewhat from

23		the briefing on both sides. But if you would address

24		those, it would be helpful. And I’m happy to have you


		CHANCERY COURT REPORTERS



		33

1		make whatever overarching comments you want.

2		ATTORNEY DAVEY: Yeah. Well, and I’m

3		happy to hear your articulation of the three claims so

4		I make sure that I understand what they are. And I

5		hit that because I think there are two sort of related

6		issues on this. And one is I think we’re entitled to

7		know at the expedition stage what it is that we’re

8		getting ready to go off and litigate. Right? You put

9		your claims in a complaint. You move to expedite some

10		or all of them. The Court expedites some or all of

11		the ones you need to expedite. You come out of that,

12		and this is the claim we’re moving forward with.

13		THE COURT: Well, the first one I

14		heard was that the proxy and the public statements of

15		the company suggest that Mr. Casdin recused himself

16		from the entire 2022 process when the evidence of

17		record indicates otherwise and that that’s a material

18		misdisclosure, false disclosure. That’s number one.

19		Maybe you can respond to that.

20		ATTORNEY DAVEY: Yes, certainly. And

21		I think this ties in nicely to one of the overarching

22		comments, because where the evidence for that claim --

23		there’s no assertion that Mr. Casdin did not recuse

24		himself from the consideration of this merger, the


		CHANCERY COURT REPORTERS



		34

1		merger that we’re here discussing. Right?

2		THE COURT: I understand.

3		ATTORNEY DAVEY: It’s all about the

4		2022 potential merger for which there was no

5		indication of interest; there was no proposal.

6		THE COURT: So, in your view, even if

7		the disclosures in the proxy are untrue concerning

8		Mr. Casdin’s recusal from the 2022 process, it is not

9		material because that process did not lead to a

10		merger; is that what you’re telling me?

11		ATTORNEY DAVEY: I’m saying that the

12		level of disclosure that has been made about the 2022

13		process is entirely appropriate in light of the fact

14		that it is a different transaction.

15		THE COURT: I understand that. I

16		understand that argument. I think that there is

17		rather limited disclosure that needs to be made with

18		respect to the 2022 process, but what has been

19		suggested now is that there is a materially false

20		representation that is being touted by the company to

21		convince stockholders to vote for the merger.

22		ATTORNEY DAVEY: And I understand the

23		position. I think it fails primarily for one reason.

24		And despite whatever plaintiffs may say, despite the


		CHANCERY COURT REPORTERS



		35

1		affidavit, it’s not uncontested. It is very much

2		contested.

3		I know we were faulted for not taking

4		Mr. Smythe’s deposition. On September 26, we asked

5		for Mr. Gold’s deposition. And what we were told was,

6		no, you can’t have it. We weren’t told, oh, by the

7		way, we’re working on a 45-paragraph affidavit from

8		Mr. Smythe; we’ll make him available.

9		We found out about the Smythe

10		affidavit at 1:00 a.m. on Friday morning when we, at

11		that point, had a brief due on New Year’s Eve. Right?

12		The notion that we were going to go take his

13		deposition is a little bit silly, nor did we need to

14		in order to demonstrate that it was entirely

15		unreliable.

16		And I think this is a critical fact

17		because it goes not just to the reliability of the

18		recusal. But the whole theory here is that there was

19		a vote, and that vote happened in November.

20		And then he was told by Mr. Cox that

21		Mr. Cox was going to become the executive chairman,

22		and he was essentially being demoted to CEO in name

23		only. That’s the theory.

24		And I don’t know if you have the


		CHANCERY COURT REPORTERS



		36

1		Smythe affidavit in front of you?

2		THE COURT: I do not, unfortunately.

3		ATTORNEY DAVEY: I actually brought a

4		copy because I know we had buried you in stuff, so I

5		wanted to make sure that you would have it available.

6		THE COURT: I’ve seen it, but I don’t

7		have it on the bench.

8		ATTORNEY DAVEY: You guys have them;

9		right?

10		And this goes to a point --

11		Your Honor, when I came to Delaware a long time ago as

12		a young lawyer, I had a senior lawyer tell me --

13		THE COURT: You’re still a young

14		lawyer.

15		ATTORNEY DAVEY: Oh, I appreciate

16		that.

17		I had a senior lawyer tell me that

18		citing the record is sometimes -- it’s like the second

19		baseman turning, too. You don’t actually have to

20		touch second base, but you’ve got to sort of be in the

21		vicinity.

22		And I think what we’ve got going on

23		with the Smythe affidavit is that plaintiffs aren’t --

24		they’re not even in the infield. Right? If you stick


		CHANCERY COURT REPORTERS



		37

1		with that analogy. Right? Let’s look at how the

2		Smythe affidavit is laid out. You have paragraph 29,

3		which is at page --

4		THE COURT: I have it.

5		ATTORNEY DAVEY: -- 13. And this is

6		the November meeting. And in the November meeting,

7		there’s -- there is a vote-down -- I’m sorry, the

8		vote-down is in paragraph 27.

9		29 is the next day. Mr. Smythe then

10		goes to tell Casdin, and Casdin reacts angrily. And

11		then we have a couple paragraphs that are purportedly

12		about retaliatory conduct. Right?

13		And then we get to 33. And 33 says,

14		“In late Fall 2022, [] Cox met with me and told me

15		that while I ‘was not being fired,’ the Board had

16		decided that I should no longer continue as CEO, and

17		that he would become [the] [] ‘Executive

18		Chair[man]’ ....”

19		Right? He would become the executive

20		chairman.

21		Now, I think probably based on the

22		assumption that people think events are presented

23		chronologically, you might think that this went boom,

24		boom, boom, right? The order of operations is the


		CHANCERY COURT REPORTERS



		38

1		vote-down, Casdin gets angry; he’s removed. Right?

2		But if you look in 33, it’s a little

3		interesting, right? Because you get this hint that he

4		says in the third sentence, it says, “At this time, in

5		addition to continuing to consider the Standard

6		deal ...,” right? “[I]n addition to considering the

7		Standard deal ....”

8		So the deal is still alive. The vote

9		hasn’t happened. That’s what his affidavit says,

10		right?

11		Now, then you go to what plaintiffs do

12		with it. In their opening brief, citing that

13		paragraph, they say that two months after the

14		vote-down, he was removed. That’s what they said,

15		paragraph 33. If you go to paragraph 33, it doesn’t

16		say it was after the vote-down. And it certainly

17		doesn’t say anything about two months. But they’re

18		like reaching in from the warning track to get to

19		second base in order to keep this claim alive.

20		And you don’t need to take my word for

21		it when all this happened. We put in an exhibit this

22		morning. I believe it’s Exhibit JJ. And that’s an

23		8-K that the company issued on October 18, 2023, that

24		stated that Mr. Cox, the previous day, had become the


		CHANCERY COURT REPORTERS



		39

1		executive chairman.

2		So this conversation telling him that

3		Mr. Cox would become the executive chairman, that

4		happened in October before the vote-down. The whole

5		thing sort of devolves on itself, and then going and

6		sort of taking his word for the recusal seems silly.

7		Also, I’ll point out the other key

8		chronological order -- it’s not really chronological.

9		The thrust of this is that I was removed because I

10		disagreed.

11		And, in fact, we’ve heard today the

12		company violated the securities regs because they

13		didn’t note that he actually resigned because of a

14		disagreement.

15		But that 8-K, it was issued by the

16		company and Dr. Smythe. And in it, Dr. Smythe stated

17		that he was leaving to pursue other opportunities.

18		Dr. Smythe and his counsel reviewed the 8-K before it

19		was filed. If it was not true at the time, certainly

20		he would not have lied about it.

21		What we’ve got going on is just

22		revisionist history. I don’t think we can begin to

23		take their word for it. And I don’t think they get

24		into or are entitled to rely on the authorities about


		CHANCERY COURT REPORTERS



		40

1		an uncontested affidavit: one, under the conditions

2		in which this case was litigated; and, two, when it is

3		demonstrably an unreliable affidavit. So that’s where

4		it would be with the Eli Casdin recusal issue.

5		THE COURT: What does the proxy -- and

6		when I use that term, I’m including the revisions --

7		what does the proxy tell stockholders about Casdin’s

8		recusal?

9		ATTORNEY DAVEY: Well, I think that

10		they have put in front of Your Honor the relevant

11		paragraphs. Right? And they’ve highlighted each of

12		them. I believe -- I believe if we look at -- sorry.

13		And what they say is that he recused himself with

14		respect to this merger. Right? And there’s -- again,

15		there’s no evidence in the record whatsoever --

16		THE COURT: Which one?

17		ATTORNEY DAVEY: So I think that

18		the -- I’m looking at their excerpts, Your Honor. So

19		on the first page, it says December 1, 2023. So that

20		would have been from the definitive. And they’ve got

21		the page 2.

22		THE COURT: Page 2. Okay.

23		ATTORNEY DAVEY: And it says -- you

24		see right there in the middle of the paragraph “with


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		41

1		respect [to] this Merger ...,” right.

2		THE COURT: Okay.

3		ATTORNEY DAVEY: And you go down to

4		the next one “with respect to [this] Merger ....”

5		THE COURT: Got it.

6		ATTORNEY DAVEY: And then the next

7		page it says that he served on the transaction

8		committee but secured -- and until SomaLogic received

9		the June 16 proposal.

10		And then you go to the next one. The

11		only one is the one on page 12 with respect to the

12		prior transaction. Right? And there, we’re back into

13		the issues with respect to the Smythe affidavit.

14		THE COURT: All right.

15		ATTORNEY DAVEY: I mean, I do think

16		that we’re suffering from this situation, the evolving

17		claims, is that they have gone into full

18		pizza principle mode, which is they understand that it

19		takes more time to clean it off the wall than it does

20		to throw it up there.

21		And in addition, they believe that if

22		they can get one little piece of pizza left on the

23		wall at the end of the day, you’re going to give them

24		what they want, which is essentially more time to work


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		42

1		to gather votes against this merger.

2		And I think we’ve just been trying to

3		clean the pizza off the wall as best we can, but the

4		claims have been consistently changing. So that was

5		the first one Your Honor wanted to focus on.

6		I understood and thought the second

7		one was really the core issue here, which was the

8		relationships, the business relationships between the

9		directors and Casdin. And I’ll turn to that now, if

10		you’d like me to.

11		THE COURT: That’s fine. That’s also

12		my understanding of what the core of the --

13		ATTORNEY DAVEY: Right. And so, look,

14		again, this is -- back to the pizza principle, they

15		put claims in their complaint, and they’ve moved to

16		expedite. We’ve said, all right, let’s moot this out

17		and let’s get on with our holidays and get on with

18		this transaction.

19		And then we received their reply to

20		the motion to expedite that included additional

21		minutia, right, that they had pulled from the public

22		filings. And they asked that we disclose that as

23		well.

24		Now, look, they’re pulling it from the


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		43

1		public filings, right? They could have included those

2		details in their complaint or their motion to expedite

3		because the proxy had been out there since the middle

4		of November. But they pulled this from the filings

5		because, I think, more pizza on the wall.

6		But we went and we revised the

7		supplemental disclosures before we issued them the

8		same day as the hearing, and we included some of the

9		minutia that they asked for.

10		Right. And so what you get in the

11		supplemental disclosures that were issued on

12		December 28, we reproduced those on 36, pages 36 to 38

13		of our brief. And they’re very thorough disclosures.

14		I think much of the stuff that is disclosed is not

15		material. I mean, it includes that Kathy Hibbs is the

16		chief administrative officer of 23andMe, a company

17		which Casdin Capital at one point had a 1.3 percent

18		investment. And now they want additional disclosure

19		about that position. That’s what they want now, is

20		additional disclosure about that position.

21		They go so far as to suggest that, as

22		a matter of Delaware law, that relationship renders

23		her beholden to Mr. Casdin. So an officer of a

24		corporation is beholden to a 1.3 percent stockholder.


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		44

1		Right?

2		But I think that gives you an example

3		of where they are, right, is that they are out in

4		outer field; they’re stretching towards second base;

5		and they’re throwing pizza at the wall. But it just

6		doesn’t stick.

7		And so now the disclosure is just more

8		details, more details. We want more details. They

9		haven’t shown that any of the additional minutia --

10		they haven’t shown a case that would say, yes, you

11		also have to disclose that. Yes, you also have to

12		disclose that. That’s their burden. They haven’t

13		done it. Those claims are moot.

14		Now, what they’ve done is they’ve sort

15		of tacked on to that these -- some are disclosure

16		claims, and some aren’t claims. But they concern what

17		the board knew and the conclusions the board reached

18		about independence. They start with what is not

19		really a disclosure claim, but it seems like a

20		criticism of the process. And that is that the board

21		didn’t consider or wasn’t aware of the various

22		relationships when the new directors joined the board.

23		There’s not some disclosure that they’re attacking on

24		that. But I’ll point out that they’re wrong.


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		45

1		Mr. Ryan basically said, look, we were

2		all coming in from the life sciences area. People

3		understood that. People understood there were
	��
4		preexisting relationships.

5		And if you go and you look at the

6		proxy that was signed by all the directors for the

7		annual meeting that was held in April of 2023, which

8		we submitted today as Exhibit KK, they make disclosure

9		about the relevant relationships.

10		They say, for instance, that Mr. Ryan

11		is the chairman -- is the executive chairman of

12		GeneDx. Now, we thought because that was never

13		disclosed -- it’s right there. Right? They were

14		aware of it. They signed it. It says that he was the

15		chairman of GeneDx.

16		It also says that Mr. Casdin was on

17		the nominating and compensation committee of GeneDx.

18		These relationships were out there. They were

19		disclosed. People knew about them. And plus that’s

20		not a disclosure claim. It’s just a criticism of the

21		transaction.

22		The next point they jump to is the

23		statement in the proxy that around the time that the

24		June 16 proposal came in and that they complained that


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		46

1		the proxy discloses that at that time, the SomaLogic

2		board believed that the members of the SomaLogic

3		transaction committee did not have any relationships

4		that would represent a conflict of interest with

5		respect to a potential transaction with Standard.

6		Now, as an initial matter, the Court

7		routinely rejects disclosure claims targeted at

8		subjective beliefs. That’s in the In re: Mony Group.

9		So this isn’t a claim, but what they try to do is

10		convert it into a claim because they assert that

11		people didn’t know or there wasn’t some formal

12		disclosure of the claims.

13		But, again, Ryan’s testimony said,

14		look, we were all generally aware of this; we knew

15		about this. And you know they knew about it because

16		you can go back to that April proxy for the annual

17		meeting where this is disclosed.

18		And so, finally, we get to the last of

19		that sort of type of disclosure, and it concerns the

20		board’s consideration of the business relationships

21		during the October 1 board meeting. And, look, we’ve

22		been litigating that this -- this claim has been in

23		there from the beginning. And somewhat frustratingly,

24		for a long time, they just complained the board never


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		47

1		considered it. Well, it’s in the minutes.

2		And Mr. Ryan pointed that out, that it

3		was in the minutes. And then he said -- explained, we

4		went around the room and we explained what our

5		business relationships are.

6		So what is the claim now? The claim

7		is that -- here’s what the proxy says: “([T]he

8		‘SomaLogic Board’) was aware of the business

9		relationships between members of the SomaLogic Board,

10		Casdin Capital ... and Eli Casdin, which the SomaLogic

11		Board did not consider to represent [the] conflict of

12		interest with respect to the [] Merger ...,

13		includ[ing] the following ....” And then it

14		identifies all of these various relationships.

15		And the claim is that this is

16		misleading because Ryan did not disclose the specifics

17		of his compensation as reported in that, like as

18		they’re described in that. But the business

19		relationships were disclosed. There’s no question

20		about it.

21		And his testimony establishes that

22		everybody was aware of the position beforehand. So it

23		really just comes down to the compensation. The

24		compensation was standard. This isn’t the business


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		48

1		relationship. This is a detail of the business

2		relationship that they haven’t been able to

3		demonstrate is material.

4		In any event, it has now been

5		disclosed to stockholders, and stockholders can make a

6		determination about it.

7		So that’s all I have on the director

8		claims. If you think I’ve missed something, I’ll try

9		to swing back to it.

10		THE COURT: No. I think you hit it.

11		ATTORNEY DAVEY: Then the LRP claim.

12		Plaintiffs are seeking a conclusion that they’ve

13		reached based on their review of the June 16

14		provision. And their reading sort of twists beyond

15		recognition what that presentation says. They want

16		the company to tell the stockholders that Perella

17		advised the transaction committee and board that

18		SomaLogic was well-positioned to continue operating as

19		a stand-alone basis.

20		That’s not what the presentation said

21		in total, and it also requires accepting plaintiffs’

22		flawed premise that the outcome of that was that the

23		board just rushed off and completed a transaction.

24		Neither of those things are true.


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		49

1		On the timing point, the company was

2		deliberative. Right, they got a proposal on June 16.

3		They didn’t go back with a counterproposal until

4		August 11.

5		And during that time, they reached out

6		to 16 counterparties and met many times with their

7		financial advisor to kick the tires both on the

8		long-range plan and on to the proposal.

9		THE COURT: When they got a lowball

10		offer, they were willing to walk away.

11		ATTORNEY DAVEY: And when they got a

12		lowball offer, they walked away, twice. So it doesn’t

13		support their narrative.

14		But what they’re asking the company to

15		disclose, you’ve got to go out with a summary. We

16		can’t disclose all 18 points that are in that

17		slide deck. It wouldn’t give a fair representation.

18		And what Mr. Ryan testified to was

19		that when the board heard that, they all agreed that

20		the one thing the company couldn’t do was stand still

21		in the market. The company had to do something. They

22		had to revise their long-range plan. They had to

23		consider whether they could revise it to a point where

24		they could be a stand-alone company, and they had to


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		50

1		consider strategic alternatives. And that’s what they

2		did. Right?

3		That sort of defeats the second part

4		of their claim, which is that we should have to

5		disclose the long-range plan from the 6th as if it

6		was, like, the be-all and end-all, final product. It

7		wasn’t. The July 11 one was.

8		And, in any event, there is a

9		narrative description of the June 6 proposal in the

10		supplemental disclosures that we made in response to

11		this claim in the first instance, which was, okay,

12		fine, here’s a description of it. It tells how it

13		changed from June 6 to July 11, and then the

14		stockholders also have the entire July 11 plan as

15		summarized and typical in these documents. We just

16		don’t think there’s anything on the LRP claim that is

17		worthy of further disclosure.

18		Any other claims that you’d like to

19		hear me talk about?

20		THE COURT: No, not claims. If you

21		want to say anything on the balance of the equities

22		and whether there is any risk to the company of losing

23		the merger if there is an injunction.

24		ATTORNEY DAVEY: Well, let me start


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		51

1		with this. All right. There is a very active proxy

2		contest going on. The company put out a statement.

3		Madryn put out a statement. Madryn has published

4		their complaint. Madryn is making all the arguments

5		that plaintiffs have made here. Right?

6		There is no -- like, the Smythe -- you

7		asked a question earlier about, well, isn’t that just

8		Smythe’s legal theories? Right? Aren’t you asking

9		for that?

10		And the reality is that Smythe’s legal

11		theories, Smythe’s sort of perspective on this has

12		been disclosed. It was quoted by Madryn, and it was

13		read to Your Honor at the motion to expedite.

14		Smythe’s out there. Right? The stockholders are not

15		missing any information. Right?

16		And to the equities point, look, there

17		is not another deal out there. The directors think

18		this is the best deal. Time is the enemy of all

19		deals. That’s always true. We don’t need, like --

20		there’s no reason to further delay this. We can have

21		the meeting. This meeting was set under ordinary

22		circumstances between 30 and 35 days from going

23		effective. We’re required under the merger to have it

24		within 45 days.


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		52

1		So, yeah, there’s risk. And it’s

2		not -- it’s risk, just the ordinary risk that drives

3		companies to want to close deals.

4		THE COURT: What is the timing of

5		tomorrow’s meeting? And what is the end time for

6		submission of votes at the meeting?

7		ATTORNEY DAVEY: Your Honor, I would

8		imagine that it starts early tomorrow morning, like

9		8:30 or 9:00. I don’t know for a fact. I don’t know

10		when the polls close. I know that the company retains

11		the power to adjourn the meeting.

12		So at a minimum, regardless of what

13		Your Honor does, the meeting will probably be convened

14		tomorrow and adjourned. But, obviously, what they’d

15		like --

16		THE COURT: You’ve presented a lot of

17		information. I want to give as thorough a decision as

18		I can.

19		I want to know when I have to render a

20		decision and after which point mischief will accrue if

21		I haven’t. That’s what I’m looking for.

22		ATTORNEY DAVEY: So the meeting begins

23		at 10:00 a.m. Mountain Time, so 12:00 p.m. Georgetown

24		time.


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		53

1		THE COURT: Okay. So if I reconvened

2		us by phone and rendered a bench decision first thing

3		in the morning, that would not disrupt the meeting

4		unless I enjoin it, in which case it doesn’t matter?

5		ATTORNEY DAVEY: I should be clear.

6		To be very clear, we would ask that you -- if you were

7		going to enjoin, that you enjoin the stockholder vote

8		and not the meeting.

9		THE COURT: Okay. That was a

10		sloppiness on my part. I understand that. But the

11		timing is I could reconvene us by phone at 9:00

12		without disrupting the process?

13		ATTORNEY DAVEY: Yes, Your Honor.

14		THE COURT: Okay. Anything else you

15		want to tell me?

16		ATTORNEY DAVEY: No, Your Honor.

17		THE COURT: Thank you. That was

18		helpful.

19		Anyone else from the bride’s side?

20		Mr. DiCamillo?

21		ATTORNEY DiCAMILLO: I appreciate the

22		opportunity, Your Honor, but nothing further from me.

23		THE COURT: All right. Thank you.

24		I’ll be happy to hear any rebuttal.


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		54

1		ATTORNEY WELSH: If I may, Your Honor.

2		I’ll try and keep it brief.

3		THE COURT: Take your time.

4		ATTORNEY WELSH: Your Honor, I believe

5		that Mr. Davey responded to Your Honor’s question

6		focused on the Casdin recusal disclosures on a twofold

7		basis.

8		One, that the proxy, as I understood

9		Mr. Davey’s argument -- and I may have misunderstood,

10		and I apologize if I did -- that the proxy may not be

11		misleading because it might be referring only to this

12		transaction and the March 23 forward process.

13		I think, again, if you look at the

14		page 10/page 12 excerpts that we’ve provided to

15		Your Honor and to the Court, it is clearly referring

16		to the 2021 to 2022 period in the first instance and

17		2022 period in the second instance. And it does say

18		in each case during this period, so it’s clearly tying

19		to this --

20		THE COURT: No. And I think, to be

21		fair to Mr. Davey, he did point that out. He said the

22		first ones are this merger, the first couple of

23		references.

24		And then with respect to the latter,


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		55

1		his argument was, I can’t rely on the Smythe affidavit

2		because it’s not reliable.

3		ATTORNEY WELSH: Got it. I appreciate

4		that, Your Honor. That’s probably why I was

5		tentative. I wasn’t quite clear on that.

6		THE COURT: That’s my understanding,

7		in any event.

8		ATTORNEY WELSH: That makes sense,

9		Your Honor. And if that’s the reading, I agree with

10		that reading, of the proxy.

11		THE COURT: If I’ve misstated your

12		position, tell me now.

13		ATTORNEY DAVEY: I think you’ve said

14		it accurately, probably better than I did.

15		THE COURT: I doubt that.

16		In any event, go ahead.

17		ATTORNEY WELSH: On the Smythe

18		affidavit, Your Honor, I guess I’d say a couple

19		things.

20		One, this discussion was framed in

21		terms of the pizza principle and the evolving claims.

22		I like the pizza principle analogy. I’ve always liked

23		that.

24		I think that was a Vice


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		56

1		Chancellor/Chancellor Strine about discovery disputes,

2		and I’ve used that in my briefings.

3		THE COURT: I’m forced to point out

4		that if you had my dogs, you wouldn’t think that it

5		was harder to clean up pizza than throw it at the

6		wall.

7		ATTORNEY WELSH: We all need a couple

8		of those dogs.

9		In terms of the evolving claims,

10		Your Honor, I won’t dwell on that. I mean, I’ve cited

11		a bunch of paragraphs from the complaint.

12		THE COURT: You don’t need to worry

13		about that.

14		ATTORNEY WELSH: That’s been the hard

15		core of our case from day one.

16		On Mr. Davey’s presentation at

17		paragraph 33, I think what that boils down to is a

18		question or a debate around whether the vote happened

19		in November or maybe earlier, October.

20		And in fairness to Mr. Smythe, again,

21		I think I mentioned before he did this a very short

22		time over the holidays while he was on vacation with

23		his family, had no documents at all. He told us all

24		of his emails and everything had been wiped when he


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		57

1		left the firm.

2		THE COURT: It must have been

3		bittersweet hearing him complain about how his holiday

4		is being impinged upon to this group.

5		ATTORNEY WELSH: He was very patient

6		with us.

7		But even with that, Your Honor,

8		paragraph 25 of the Smythe affidavit says, “In or

9		around November [of] 2022 ... [they] held a formal

10		vote ....”

11		So it’s not clearly pinned to

12		November. The proxy does say the process terminated

13		in November, so that certainly seemed to us credible.

14		But, again, Mr. Smythe was going off of just his pure

15		recollection with no assistance.

16		The other key point there is -- and

17		Mr. Davey talked about depositions, and we agree, it

18		would have been hard to take Smythe’s deposition. We

19		did tell Smythe, you’re probably going to be deposed.

20		And certainly he would have made himself available,

21		but it was certainly a very compressed time frame. We

22		don’t disagree with that.

23		But I’d just note, Your Honor, that

24		they could have done other things like put in


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		58

1		affidavits from Cox, Post, Willis, Meisel, even

2		Casdin.

3		I think we would have complained

4		volubly if they put in Casdin because we wanted to

5		depose him and they wouldn’t make Casdin available.

6		The point is they could have provided

7		minutes or agendas or whatever to show who was

8		attending. None of that’s been provided. So I think

9		Smythe’s affidavit is fairly unrebutted and should

10		stand on its face.

11		On that basis, I think, Your Honor,

12		the Casdin recusal representation is clearly false and

13		misleading in material respects for the reasons I’ve

14		already covered.

15		On the director independence claim,

16		I’ll just touch on that very quickly. I mean,

17		Hibbs -- again, Hibbs is marginal. Hibbs is a tougher

18		argument than the other three, but she’s one of the

19		four March 28 directors. And one of the transaction

20		committee is not a majority -- I’m sorry. One of the

21		transaction committee members is not a majority of the

22		transaction committee members.

23		THE COURT: Mr. Davey alleges that

24		this is not a disclosure claim. I assume you’re


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		59

1		making it as a disclosure claim, but it’s a little

2		hard to see what the disclosure did say.

3		ATTORNEY WELSH: Well, so two things

4		on that.

5		One -- and I’m tentative again, trying

6		to keep track of all the moving parts in this whole

7		situation, but I believe I heard Mr. Davey say that

8		there’s no disclosure on this precise issue. And we

9		disagree with that.

10		I mean, there is a disclosure that

11		Mr. -- that tracks Mr. Davey’s discussion of the

12		October 1st board meeting in the background of the

13		merger, right, which says that they disclosed the

14		conflicts above, which did not include the GeneDx one,

15		for example.

16		But there’s another disclosure in the

17		proxy that we contend is materially false and

18		misleading. It was materially false and misleading in

19		the original proxy. It remains in the current form of

20		the proxy, and it’s on page 99 of the proxy. And it

21		refers to the sale process. Right? And what it says

22		is -- and I emphasize that because I think it fairly

23		encompasses the whole period of time we’re talking

24		about here, at least from March to October, not just


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		60

1		the signing or agreement to do the merger. It

2		encompasses the process.

3		And the sale process disclosure says,

4		“Although there were certain existing relationships

5		between members of the SomaLogic Board and

6		Mr. Casdin ... the SomaLogic Board did not consider

7		any of those relationships to represent a conflict of

8		interest with respect to the Merger.”

9		We would contend, Your Honor, that’s

10		materially misleading. It’s intended to be materially

11		misleading as to when did the SomaLogic board consider

12		any of those relationships to represent a conflict of

13		interest.

14		We think that only occurred in

15		October, and that’s meant to mislead stockholders into

16		thinking it happened on the front end, and the

17		independent directors who were represented to be

18		independent for purposes of overseeing and negotiating

19		this transaction made full disclosure at the beginning

20		of the process versus the very end right before they

21		signed the merger. So there is a disclosure right on

22		point that we think is materially misleading.

23		I mean, the disclosures in the 14A, I

24		mean, the idea that biographical information of the


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		61

1		various companies where people have served in a 14A

2		suffices for full disclosure by fiduciaries in the

3		context of board deliberations I think would run

4		contrary to substantial Delaware precedent,

5		Your Honor.

6		These directors --

7		THE COURT: I’m sorry. You lost me.

8		Make that point again.

9		ATTORNEY WELSH: I’m sorry. The

10		biographical information, which in Mr. Ryan’s case,

11		like the third from the bottom line, after a long

12		description of the various companies, mentions GeneDx.

13		He was an executive chair of GeneDx. It doesn’t say

14		Casdin owned 13.9 percent of GeneDx. It doesn’t say

15		Casdin contemporaneously served on the comp committee

16		or the nominating and governance committee at the time

17		that Mr. Ryan was on -- the executive chairman. It

18		doesn’t say anything about his comp.

19		So the idea that that substitutes for

20		full transparent disclosure by one director to other

21		directors in the context of a board process I think

22		doesn’t fly.

23		Just checking my notes, Your Honor, to

24		see if I’ve forgotten anything. I apologize.


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		62

1		I think that’s it. With that,

2		Your Honor, I’ll sit down. Thank you very much,

3		Your Honor.

4		THE COURT: All right. We went a

5		little bit afield. I’ll give you another chance,

6		Mr. Davey, if you want it.

7		ATTORNEY DAVEY: I’m going to decline

8		the chance, but I appreciate the opportunity.

9		THE COURT: All right. Thank you.

10		Counsel, I’ve said it before in this

11		matter, and I’ll repeat it: I am somewhat awed by

12		your ability to produce high-quality briefing on such

13		a short time frame, included in which were a number of

14		holidays. And I very much appreciate it. I’m deeply

15		grateful for your ability to clarify things for me in

16		the way you have.

17		I know there are many people who are

18		not here who had a material part in that and who

19		sacrificed over the last two weeks. If you would

20		convey to them my thanks, I would appreciate it.

21		What I’m planning to do is convene us

22		at 9:00 on the phone with a court reporter, and I’ll

23		give you a bench decision at that time.

24		I would rather do it now, but I don’t


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		63

1		think I can do it justice without reviewing what has

2		been presented here today, as well as the briefing,

3		which I’ve had a chance to review closely.

4		Anything else we can do before we

5		break?

6		ATTORNEY DAVEY: No, Your Honor.

7		ATTORNEY WELSH: Nothing from the

8		plaintiffs, Your Honor. Thank you, Your Honor.

9		THE COURT: Thank you. Happy new

10		year. And I’ll talk to you in the morning.

11		(Proceedings concluded at 2:17 p.m.)

12		- - -

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		64

1		CERTIFICATE

2

3		I, DOUGLAS J. ZWEIZIG, Official Court

4		Reporter for the Court of Chancery of the State of

5		Delaware, Registered Diplomate Reporter, Certified

6		Realtime Reporter, do hereby certify the foregoing

7		pages numbered 3 through 63, contain a true and

8		correct transcription of the proceedings as

9		stenographically reported by me at the hearing before

10		the Vice Chancellor of the State of Delaware, on the

11		date therein indicated.

12		IN WITNESS WHEREOF, I have hereunto

13		set my hand at Wilmington this 3rd day of January,

14		2024.

15

16

17

18		/s/ Douglas J. Zweizig
		----------------------------------------
19		Douglas J. Zweizig
		Official Court Reporter
20		Registered Diplomate Reporter
		Certified Realtime Reporter
21

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		CHANCERY COURT REPORTERS

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