UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Schedule 14A

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:

Enzo Biochem, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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

ENZO BIOCHEM, INC.

81 Executive Blvd. Suite 3

Farmingdale, New York 11735 

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

To be held on [●], 2023

To All Shareholders of Enzo Biochem, Inc.:

NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the “Special Meeting”) of Enzo Biochem, Inc., a New York corporation (“we” or the “Company”), will be held virtually via live webcast at www.virtualshareholdermeeting.com/ENZ2023SM on [●], 2023 at [●] a.m., EDT, for the following purposes.

Our board of directors (our “Board”) adopted and approved, and on March 16, 2023 we entered into, an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Laboratory Corporation of America Holdings, a Delaware corporation (“Labcorp” or the “Buyer”), whereby our subsidiary Enzo Clinical Labs, Inc. will sell substantially all the operating assets and assign certain liabilities of our clinical laboratory business (the “Business”) to the Buyer (the “Asset Sale”). If the Asset Sale is completed, we may be required to provide certain transition services to the Buyer for a period of time following the closing of the Asset Sale as described more fully in the attached Proxy Statement.

At the Special Meeting or any postponement or adjournment thereof, you will be asked to approve the Asset Sale and adopt the Asset Purchase Agreement. You will also be asked to approve a proposal to adjourn the Special Meeting if there are insufficient votes at the time of the Special Meeting to approve the Asset Sale.

After careful consideration, our Board adopted and approved the Asset Purchase Agreement and determined that the Asset Sale is fair to, advisable and in the best interests of, the Company and its shareholders. Our Board recommends that you vote:

The proxy statement attached to this letter provides you with information about the proposed Asset Sale and the Special Meeting. I encourage you to read the entire proxy statement carefully. You may also obtain additional information about us from documents filed with the U.S. Securities and Exchange Commission (the “SEC”), including our financial statements and notes thereto included in our most recent filing on Form 10-K for the fiscal year ended July 31, 2022 and subsequent periodic and interim report filings (see the section entitled “Where You Can Find More Information” beginning on page 48).

Only shareholders of record as of the close of business on [●], 2023, the date fixed by the Board as the record date for the Special Meeting, are entitled to notice of, and to vote at, the Special Meeting. This Special Meeting will be a completely virtual meeting. There will be no physical meeting location. The meeting will be conducted via live webcast. Shareholders will have the same rights and opportunities to participate in our virtual Special Meeting as they would at an in-person meeting. For more information on our virtual Special Meeting, including details on how to attend the meeting, see the instructions under “Instructions for the Virtual Special Meeting” on page iii of this Proxy Statement.

Your vote is very important. The Asset Sale cannot be completed unless the Asset Sale Proposal is approved by the affirmative vote of a majority of the shares of our common stock, par value $0.01 per share (“Common Stock”), outstanding and entitled to vote thereon. Failing to vote on the Asset Sale Proposal, or to instruct your broker or other nominee on how to vote, will have the same effect as a vote “AGAINST” the Asset Sale Proposal.

Whether or not you plan to attend the Special Meeting, and regardless of the number of shares of Common Stock you own, please vote as soon as possible. We urge you to date, sign and return the proxy card in the envelope provided to you, or to use the telephone or Internet method of voting described on your proxy card, even if you plan to attend the Special Meeting, so that if you are unable to attend the Special Meeting, your shares can be voted. Any shareholder of record who submits a proxy card retains the right to revoke such proxy card by: (i) submitting a written notice of such revocation to the Chief Executive Officer of the Company so that it is received no later than 5:00 p.m., EDT on [●], 2023; (ii) submitting a duly signed proxy card bearing a later date than the previously signed and dated proxy card to the Chief Executive Officer of the Company so that it is received no later than 5:00 p.m., EDT on [●], 2023; or (iii) attending the Special Meeting virtually and voting thereat the shares represented by such proxy card. Attendance at the Special Meeting will not, in and of itself, constitute revocation of a completed, signed and dated proxy card previously returned. All such later-dated proxy cards or written notices revoking a proxy card should be sent to Enzo Biochem, Inc., 81 Executive Blvd. Suite 3, Farmingdale, New York 11735, Attention: Hamid Erfanian, Chief Executive Officer. If you hold shares of Common Stock in street name, you must contact the firm that holds your shares to change or revoke any prior voting instructions.

Please carefully read the enclosed Proxy Statement, which explains the proposals to be considered by you and acted upon at the Special Meeting. Please consult your financial, income tax or other professional advisor as appropriate.

The Board has fixed the close of business on [●], 2023 as the record date for the determination of holders of record of Common Stock entitled to notice of, and to vote at, the Special Meeting. A list of shareholders of record of the Company as of the record date will remain open for inspection during the Special Meeting until the closing of the polls.

If you have any questions about the procedures for admission to the Special Meeting, please contact Investor Relations at (631)-755-5500.

Neither the Securities and Exchange Commission nor any state securities regulatory agency has approved or disapproved the Asset Sale or passed upon the adequacy or accuracy of the disclosure in the attached proxy statement. Any representation to the contrary is a criminal offense.

ALL HOLDERS OF RECORD OF COMMON STOCK (WHETHER THEY
INTEND TO ATTEND THE SPECIAL MEETING OR NOT) ARE STRONGLY
ENCOURAGED TO COMPLETE, SIGN, DATE AND RETURN PROMPTLY THE PROXY
CARD ENCLOSED WITH THE ACCOMPANYING PROXY STATEMENT.

ENZO BIOCHEM, INC.

PROXY STATEMENT

SPECIAL MEETING OF SHAREHOLDERS

To be held on [●], 2023

This Proxy Statement is being furnished in connection with the solicitation of proxies by and on behalf of the Board of Directors (the “Board”) of Enzo Biochem, Inc., a New York corporation (“we” or the “Company”) and is being first made available to our shareholders on [●], 2023, for use at a Special Meeting of Shareholders (the “Special Meeting”) to be held virtually via live webcast at www.virtualshareholdermeeting.com/ENZ2023SM, on [●] , 2023 at [●] a.m., EDT, for the following purposes:

(1) to consider and vote on a proposal to approve the sale (the “Asset Sale”) of substantially all the assets and assignment of certain liabilities of our clinical laboratory business (the “Business”) to Laboratory Corporation of America Holdings, a Delaware corporation (“Labcorp” or the “Buyer”) and adopt the Asset Purchase Agreement, dated as of March 16, 2023 (as such agreement may be amended from time to time, the “Asset Purchase Agreement”), by and among the Company, Enzo Clinical Labs, Inc., a New York corporation (the “Seller”) and the Buyer (the “Asset Sale Proposal”); and

(2) to consider and vote on a proposal to approve the adjournment of the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to approve the Asset Sale Proposal (the “Adjournment Proposal”).

Only shareholders of record of our Common Stock as of the close of business on [●], 2023 are entitled to notice of, and to vote at, the Special Meeting and any adjournment of the Special Meeting. If you hold shares through a broker or other nominee, you must follow the procedures provided by your broker or other nominee in order to vote your shares at the Special Meeting.

The Board may use the services of the Company’s directors, officers and other regular employees to solicit proxies personally or by telephone and may request brokers, fiduciaries, custodians and nominees to send proxies, proxy statements and other materials to their principals and reimburse them for their out-of-pocket expenses in so doing. We have also retained Kingsdale Advisors, a proxy advisory and solicitation firm, to assist with the solicitation of proxies and provide related advice and informational support, for a services fee, plus customary disbursements, which are not expected to exceed $20,000 in total. The cost of services and solicitation of proxies, estimated to be approximately $20,000, will be borne by the Company. Each proxy duly executed and returned to the Company is revocable. The procedure a shareholder must follow to revoke its proxy depends on how such shareholder holds its shares. Registered holders of our Common Stock may revoke a previously submitted proxy by submitting another valid later dated proxy or by providing a written notice of such revocation to the Chief Executive Officer of the Company before the closing of the polls at the Special Meeting. Only the latest dated validly executed proxy will count. Shareholders also may revoke any previously submitted proxy by attending the Special Meeting and voting their shares during the Special Meeting. Note that simply attending the Special Meeting without taking one of the above actions will not revoke a proxy. In general, shareholders holding shares in “street name” may revoke previously submitted voting instructions by submitting to their custodian another valid voting instruction or a signed letter of revocation. Shareholders holding shares in “street name” should contact their custodian for detailed instructions on how to revoke their voting instruction and the applicable deadlines.

Instructions for the Virtual Special Meeting

The Special Meeting will be a completely virtual meeting. There will be no physical meeting location. The Special Meeting will be conducted via live webcast. Shareholders will have the same rights and opportunities to participate in the virtual Special Meeting as they would at an in-person meeting.

To attend the virtual Special Meeting, visit www.virtualshareholdermeeting.com/ENZ2023SM and enter the 16-digit control number included on your proxy card or voting instruction form. The meeting will start at 9:00 a.m., EDT on [●], 2023. We encourage you to access the virtual Special Meeting prior to the start time to familiarize yourself with the virtual platform and ensure you can hear the streaming audio. Online access will be available starting at [●] a.m., EDT on [●], 2023.

The virtual Special Meeting platform is fully supported across browsers (Firefox, Chrome, and Safari) and devices (desktops, laptops, tablets and cell phones) running the most updated version of applicable software and plugins. Participants should ensure that they have a strong WiFi connection from wherever they intend to participate in the virtual Special Meeting.

While we strongly encourage you to vote your shares prior to the virtual Special Meeting, shareholders may also vote during the meeting. Once logged in, you will be able to vote your shares by clicking the “Vote Here!” button.

Shareholders may submit written questions once logged into the virtual Special Meeting platform. Questions pertinent to meeting matters will be answered during the question and answer portion of the virtual Special Meeting, subject to a time limit prescribed by the Rules of Conduct that will be posted to the virtual Special Meeting platform on the day of the meeting. The Rules of Conduct will also provide additional information about the relevancy of questions to meeting matters.

If you encounter any difficulties accessing the virtual Special Meeting during the check-in or meeting time, you should call the technical support number that will be posted on the virtual shareholder meeting login page.

Voting Securities and Votes Required

The Board has fixed the close of business on [●], 2023 as the record date for determination of shareholders entitled to notice of, and to vote at, the Special Meeting (the “Record Date”). As of the Record Date, the Company had outstanding [●] shares of Common Stock. Each share of Common Stock entitles the record holder thereof to one vote on each matter brought before the Special Meeting. No shares of preferred stock were outstanding as of the Record Date. The holders of a majority of the outstanding shares of Common Stock, represented in person or by proxy, constitutes a quorum.

Under New York law, you have the right to file a written objection including a notice of election to dissent to the Asset Sale and demand payment of the “fair value” of your shares with the Company. If you intend to dissent and demand payment of the “fair value” of your shares, you must comply with the provisions of Section 623 of the New York Business Corporation Law in order to receive payment for your shares. We will require strict compliance with the statutory procedures. For more information about your right to dissent, please turn to “The Asset Sale— Dissenters’ Rights” beginning on page 32.

A shareholder who abstains from voting on any or all proposals will be included in the number of shareholders present at the Special Meeting for the purpose of determining the presence of a quorum. Brokers are not permitted to vote shares without instructions on proposals that are not considered “routine.” Your broker will only be permitted to vote your shares on the approval of the Asset Sale Proposal and the Adjournment Proposal if you instruct your broker how to vote. You should follow the procedures provided by your broker regarding the voting of your shares. If you do not instruct your broker to vote your shares, your shares will not be voted, and your shares will not be counted as present for purposes of determining the presence or absence of a quorum at the Special Meeting.

The approval of the Asset Sale Proposal (Proposal 1) will require the affirmative vote of a majority of the outstanding shares of Common Stock entitled to vote. Shareholders may vote “for,” “against” or “abstain” with respect to the Asset Sale Proposal.

The approval of the Adjournment Proposal (Proposal 2) will require the affirmative vote of a majority of the total votes cast at the Special Meeting by the holders of shares present in person or represented by proxy and entitled to vote on such action at the Special Meeting.

If you are a shareholder whose shares are registered directly in your name with American Stock Transfer & Trust Company, LLC, our transfer agent, and you return a signed proxy card without giving specific voting instructions, then the individuals designated as proxy holders on the proxy card will vote your shares in accordance with the recommendations of the Board: (i) “FOR” Proposal 1, and (ii) “FOR” Proposal 2.

Please vote your proxy so your vote can be counted.

The enclosed materials require the Company’s shareholders to make important decisions with respect to the Company. Please read carefully this Proxy Statement and its annexes, as these documents contain detailed information relating to the Asset Sale. If you are in doubt as to how to make these decisions, please consult your financial, legal or other professional advisors.

Company shareholders who have questions about matters to be voted on at the Special Meeting or who desire additional copies of this Proxy Statement or additional proxy or voting instruction cards should contact:

Enzo Biochem, Inc.

81 Executive Blvd. Suite 3

Farmingdale, New York 11735

(631) 755-5500

Attn.: Investor Relations

or

Kingsdale Advisors

+1 (888) 518-1554 (toll-free in North America)

+1 (917) 341-5244 (call collect outside of North America)

e-mail: contactus@kingsdaleadvisors.com

IMPORTANT NOTICE REGARDING AVAILABILITY OF PROXY MATERIALS

This Proxy Statement, the form of proxy card, and our Annual Report on Form 10-K for our fiscal year ended July 31, 2022, are available to you on our website at www.enzo.com. Shareholders may also obtain a copy of these materials by writing to Enzo Biochem, Inc., 81 Executive Blvd. Suite 3, Farmingdale, New York 11735, Attention: Hamid Erfanian, Chief Executive Officer. Upon payment of a reasonable fee, shareholders may also obtain a copy of the exhibits to our Annual Report on Form 10-K for our fiscal year ended July 31, 2022.

TABLE OF CONTENTS

QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE ASSET SALE

The following are some questions that you, as a shareholder of the Company, may have regarding the Special Meeting, including the Asset Sale Proposal, and brief answers to such questions. We urge you to carefully read this entire proxy statement, including the unaudited pro forma financial statements contained herein and the annexes to this proxy statement and the documents referred to in this proxy statement because the information in this section does not provide all the information that may be important to you as a shareholder of the Company with respect to the Asset Sale Proposal. See “Where You Can Find More Information” beginning on page 48.

Q. Who is soliciting my proxy?

A. This proxy is being solicited by our board of directors (our “Board”).

Q. What matters will be voted on at the Special Meeting?

A. You will be asked to vote on the following proposals:

Q. How is a quorum calculated?

A. The holders of a majority of the votes of the shares of common stock of the Company issued and outstanding and entitled to vote must be present in person or by proxy to constitute a quorum for the transaction of any business. Signed proxies received but not voted will be included in the calculation of the number of shares considered to be present at the meeting.

Q. How does the Company’s Board of Directors recommend that I vote on the proposals?

A. Our Board recommends that you vote in favor of the Asset Sale Proposal and the Adjournment Proposal.

Q. What vote is required for the Company shareholders to approve the proposals?

A. In order to approve the Asset Sale Proposal, the proposal must be approved by the affirmative vote of a majority of the shares of Common Stock outstanding and entitled to vote thereon.

Approval of the Adjournment Proposal requires the affirmative vote of a majority of the total votes cast at the Special Meeting by the holders of shares present in person or represented by proxy and entitled to vote on such action at the Special Meeting.

On [●], 2023 (the record date), there were [●] outstanding shares of our common stock.

Pursuant to the Voting Agreements, certain of our directors and executive officers who collectively beneficially own up to approximately 11% of the Company’s outstanding shares of Common Stock have agreed to, among other things, vote all of the Common Stock that each of them beneficially owns (i) in favor of adoption and approval of the Asset Purchase Agreement and the Asset Sale, (ii) against any alternative transaction (as described in the Asset Purchase Agreement); and (iii) against any other action that is intended or could reasonably be expected to impede or interfere with or materially delay the Asset Sale or any other transactions contemplated by the Asset Purchase Agreement. For more information, see the section below captioned “PROPOSAL 1 - TO APPROVE THE ASSET SALE – Voting Agreements” beginning on page 40.

Q. Who is entitled to vote at the Special Meeting?

A. Holders of record of our common stock as of the close of business on [●], 2023, the record date for the Special Meeting, are entitled to receive notice of and to vote at the special meeting. On the record date, [●] shares of our common stock, held by approximately [●] holders of record, were outstanding and entitled to vote. You may vote all shares you owned as of the record date. You are entitled to one vote per share.

Q. What should I do now?

A. After carefully reading and considering the information contained in this proxy statement, including the annexes hereto, please submit a proxy for your shares by returning the enclosed proxy card. Alternatively, you may follow the instructions on the proxy card to submit your proxy by telephone or via the Internet. You may also attend the special meeting and vote in person. Please do NOT enclose or return your stock certificate(s) with your proxy.

Q. If my shares are held in “street name” by my broker, will my broker vote my shares for me?

A. Your broker will only be permitted to vote your shares on the approval of the Asset Sale Proposal and the Adjournment Proposal if you instruct your broker how to vote. You should follow the procedures provided by your broker regarding the voting of your shares. If you do not instruct your broker to vote your shares, your shares will not be voted, and your shares will not be counted as present for purposes of determining the presence or absence of a quorum at the Special Meeting.

Q. How are the votes to approve the Asset Sale Proposal counted?

A. Approval of the Asset Sale Proposal, as a condition to the completion of the Asset Sale, requires the affirmative vote of a majority of the shares of our common stock outstanding and entitled to vote thereon. Accordingly, (1) an abstention from voting, (2) a shareholder’s failure to submit a proxy card or to vote in person at the Special Meeting or (3) the failure of a shareholder who holds shares in “street name” through a broker or other nominee to give voting instructions to such broker or other nominee, will have the same effect as a vote “AGAINST” the approval of the Asset Sale Proposal.

Q. How are votes to approve the Adjournment Proposal counted?

A. For the Adjournment Proposal, approval requires the affirmative vote of a majority of the total votes cast at the Special Meeting by the holders of shares present in person or represented by proxy and entitled to vote on such action at the Special Meeting. A shareholder’s failure to submit a proxy card or to vote in person at the Special Meeting will cause those shares to be not present for purposes of determining a quorum but, assuming a quorum is present, will have no effect on the outcome of the voting with respect to the Adjournment Proposal. An abstention will have no effect on the outcome of the vote with respect to the Adjournment Proposal.

Q. What happens if I return my proxy card, but I do not indicate how to vote?

A. If you return a signed proxy card without indicating your vote, your shares will be voted “FOR” the approval of the Asset Sale Proposal and the Adjournment Proposal.

Q. When should I send in my proxy card?

A. You should send in your proxy card as soon as possible so that your shares will be voted at the Special Meeting. Alternatively, you may follow the instructions on the proxy card to submit your proxy by telephone or via the Internet.

Q. What does it mean if I get more than one proxy or vote instruction card?

A. If your shares are registered differently and are in more than one account, you will receive more than one proxy or (if your shares are held in “street name” by your broker or by another nominee) vote instruction card. Please complete and return all of the proxy and vote instruction cards you receive, or submit your proxy by telephone or the Internet, to ensure that all of your shares are voted.

The Asset Sale Proposal

Q. What is the proposed transaction?

A. The proposed transaction is the sale of substantially all the operating assets and assignment of certain liabilities of our clinical laboratory business to the Buyer, pursuant to an Asset Purchase Agreement, dated as of March 16, 2023, as such agreement may be amended from time to time.

Q. What is the Purchase Price of the Asset Sale?

A. The Purchase Price for the Asset Sale is $146 million, subject to adjustment as described herein.

Q: What are the material terms of the Asset Purchase Agreement?

A. See the section of this proxy statement entitled “PROPOSAL 1 - TO APPROVE THE ASSET SALE - Principal Provisions of the Asset Purchase Agreement” on pages 37 through 40 of this proxy statement.

Q: What will happen if the Asset Sale is approved by shareholders?

A. If the holders of at least a majority of all of the outstanding shares of Common Stock approve the Asset Sale, and the conditions to closing the Asset Sale as set forth in the Asset Purchase Agreement are satisfied or waived, the Company and its subsidiaries will sell substantially all the operating assets and assign of certain liabilities of our clinical laboratory business to the Buyer for cash. Subject to the terms and conditions stated in the Asset Purchase Agreement, after shareholder approval of the Asset Sale, Buyer will be obligated to pay a fee of $75,000 to the Company for each day after the date of such shareholder approval until the closing of the Asset Sale, provided that such fee shall not exceed an aggregate of $7,000,000.  At the closing, such fee will be wholly or partially credited against the purchase price. For more information, see the section below captioned “PROPOSAL 1 - TO APPROVE THE ASSET SALE - Principal Provisions of the Asset Purchase Agreement-Conditions to the Closing of the Asset Sale” beginning on page 38.

As soon as practicable after the closing of the Asset Sale, the Company plans to evaluate options in order to maximize shareholder value with the approval of the Board for a certain portion of proceeds to be distributed to the shareholders.

Q. Why is our Board recommending the Asset Sale?

A. Our Board believes that the Asset Sale and the Asset Purchase Agreement are fair to, advisable and in the best interests of, the Company and its shareholders. Our Board recommends that you vote “FOR” the approval of the Asset Sale Proposal. To review our Board’s reasons for recommending the Asset Sale, see the section entitled “THE ASSET SALE -Reasons for the Asset Sale and Recommendation of Our Board of Directors” on pages 15 through 17 of this proxy statement.

Q. Will the Asset Sale be a taxable transaction to me?

A. No. Our shareholders will not realize any gain or loss for U.S. federal income tax purposes as a result of the Asset Sale. See “MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE ASSET SALE” beginning on page 36.

Q. When is the Asset Sale expected to be completed?

A. We are working towards closing the Asset Sale as soon as possible, subject to the terms of the Asset Purchase Agreement. We currently expect to close the Asset Sale by the later of July 14, 2023 (which is 120 days after the signing of the Asset Purchase Agreement) or as soon as all of the conditions to the Asset Sale are satisfied or waived, including shareholder approval of the Asset Sale Proposal at the Special Meeting.

Q. Are there any risks related to the Asset Sale?

A. Yes. You should carefully read the section entitled “PROPOSAL 1- TO APPROVE THE ASSET SALE - Risks Related to the Asset Sale” beginning on page 41.

Q. Are holders of the Company’s common stock entitled to dissenters’ rights?

A. Holders of Common Stock may be entitled to dissenters’ rights under New York law in connection with the Asset Sale, provided such rights are properly perfected. Holders of Common Stock must comply with the requirements of the New York Business Corporation Law (the “NYBCL”) in order to be entitled to have the “fair value” (as described in Section 623 of the NYBCL) of their shares of Common Stock determined by judicial proceedings and to receive payment based on that valuation. The ultimate amount a holder would receive in a dissenters’ rights proceeding may be more than, the same as or less than the value of the holder’s shares of Common Stock. To exercise dissenters’ rights, holders of Common Stock must precisely comply with the requirements of the NYBCL. See “THE ASSET SALE— Dissenters’ Rights” (page 30) and the text of the New York dissenters’ rights statutes, Sections 623 and 910 of the NYBCL, which is reproduced in its entirety as Annex C to this proxy statement.

Q. What will happen if the shareholders do not approve the Asset Sale at the Special Meeting?

A. If our shareholders do not approve the Asset Sale at the Special Meeting, the Company and Buyer can terminate the Asset Purchase Agreement. If the Asset Purchase Agreement is terminated, the Company will pay to Buyer all of the reasonable and documented out-of-pocket expenses incurred by the Buyer in connection with the Asset Purchase Agreement and the transactions contemplated thereby up to a maximum of $5,000,000. Our Board, in discharging its fiduciary obligations to our shareholders, will evaluate other strategic alternatives that may be available, which alternatives may not be as favorable to our shareholders as the Asset Sale and may include the bankruptcy and liquidation of the Company. 

The Adjournment Proposal

Q. What is the effect of voting to approve the proposal to adjourn the Special Meeting, if necessary or appropriate, to solicit additional proxies?

A. If you vote in favor of the proposal to adjourn the Special Meeting, if necessary or appropriate, to solicit additional proxies, you will be voting to permit the Special Meeting to be adjourned, even if a quorum is present, in order to solicit additional votes in favor of the proposal to approve the Asset Sale. In the event that the proposal to approve the Asset Sale has not received the requisite shareholder approval, it is likely that our Board would seek to adjourn the Special Meeting to solicit additional proxies in favor of that proposal. The receipt of sufficient votes in favor of the Adjournment Proposal would allow our Board to take such action.

General

Q. What should I do if I have questions?

A. If you have more questions about the Special Meeting, the Asset Sale or this proxy statement, or would like additional copies of this proxy statement or the proxy card, you should contact:

Enzo Biochem, Inc.

81 Executive Blvd. Suite 3

Farmingdale, New York 11735

(631) 755-5500

Attn.: Investor Relations

or 

Kingsdale Advisors

+1 (888) 518-1554 (toll-free in North America)

+1 (917) 341-5244 (call collect outside of North America)

e-mail: contactus@kingsdaleadvisors.com

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement, and the documents to which we refer you in this proxy statement, contain forward-looking statements about our plans, objectives, expectations and intentions. Forward-looking statements include information concerning possible or assumed future results of operations of our company, the expected completion and timing of the Asset Sale and other information relating to the Asset Sale. You can identify these statements by words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,” “may,” and “continue” or similar words. You should read statements that contain these words carefully. They discuss our future expectations or state other forward-looking information, and may involve known and unknown risks over which we have no control, including, without limitation,

and other risks detailed in this proxy statement and our current filings with the SEC, including our most recent filings on Forms 10-Q and 10-K. See “WHERE YOU CAN FIND MORE INFORMATION” on page 48 of this proxy statement. You should not place undue reliance on forward-looking statements. We cannot guarantee any future results, levels of activity, performance or achievements. The statements made in this proxy statement represent our views as of the date of this proxy statement, and you should not assume that the statements made herein remain accurate as of any future date. Moreover, we assume no obligation to update forward-looking statements or update the reasons actual results could differ materially from those anticipated in forward-looking statements, except as required by law.

THE SPECIAL MEETING

We are furnishing this proxy statement to you, as a shareholder of the Company, as part of the solicitation of proxies by our Board for use at the Special Meeting of shareholder.

Date, Time, Place and Purpose of the Special Meeting

The Special Meeting will be held virtually over the internet using the link, www.virtualshareholdermeeting.com/ENZ2023SM, on [●], 2023 at [●] a.m., EDT, for the following purposes:

(1) to consider and vote on a proposal to approve the Asset Sale and adopt the Asset Purchase Agreement (the “Asset Sale Proposal”); and

(2) to consider and vote on a proposal to approve the adjournment of the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to approve the Asset Sale Proposal (the “Adjournment Proposal”).

Recommendation of Our Board of Directors

Our Board has determined that the Asset Purchase Agreement and the Asset Sale are fair to, advisable and in the best interests of, the Company and its shareholders. Accordingly, our Board has adopted and approved the Asset Purchase Agreement recommends that our shareholders vote (i) “FOR” the approval of the Asset Sale Proposal, and (ii) “FOR” the approval of the Adjournment Proposal.

Record Date; Shares Entitled to Vote; Quorum

The holders of record of shares of our common stock as of the close of business on April [●], 2023, which is the record date for the Special Meeting, are entitled to receive notice of and to vote at the Special Meeting.

On the record date, there were [●] shares of our common stock outstanding held by approximately [●] shareholders of record. Holders of a majority of the votes of the shares of common stock of the Company issued and outstanding and entitled to vote shall be present in person or by proxy to constitute a quorum for the transaction of any business at the Special Meeting. Abstentions (but not broker “non-votes”) will be counted as present for purposes of determining the existence of a quorum.

Vote Required

The approval of the Asset Sale Proposal requires the affirmative vote of a majority of shares of Common Stock outstanding and entitled to vote thereon. For the Adjournment Proposal, approval requires the affirmative vote of a majority of the total votes cast at the Special Meeting by the holders of shares present in person or represented by proxy and entitled to vote on such action at the Special Meeting.

Each holder of a share of our common stock is entitled to one vote per share.

Abstentions will have the same effect as a vote “AGAINST” the Asset Sale Proposal and will have no effect on the outcome of the vote with respect to the Adjournment Proposal.

Brokers or other nominees who hold shares of our common stock in “street name” for customers who are the beneficial owners of such shares may not give a proxy to vote those customers’ shares in the absence of specific instructions from those customers. These non-voted shares of our common stock will not be counted as present for purposes of determining the presence or absence of a quorum at the Special Meeting, and will have the same effect as a vote “AGAINST” the Asset Sale Proposal. These non-voted shares will have no effect on the outcome of any vote on the Adjournment Proposal, assuming a quorum is present.

Voting

The Special Meeting will be a completely virtual meeting. There will be no physical meeting location. The Special Meeting will be conducted via live webcast. Shareholders will have the same rights and opportunities to participate in the virtual Special Meeting as they would at an in-person meeting.

To attend the virtual Special Meeting, visit www.virtualshareholdermeeting.com/ENZ2023SM and enter the 16-digit control number included on your proxy card or voting instruction form. The meeting will start at [●] a.m., EDT on [●], 2023. We encourage you to access the virtual Special Meeting prior to the start time to familiarize yourself with the virtual platform and ensure you can hear the streaming audio. Online access will be available starting at [●] a.m., EDT on [●], 2023.

The virtual Special Meeting platform is fully supported across browsers (Firefox, Chrome, and Safari) and devices (desktops, laptops, tablets and cell phones) running the most updated version of applicable software and plugins. Participants should ensure that they have a strong WiFi connection from wherever they intend to participate in the virtual Special Meeting.

While we strongly encourage you to vote your shares prior to the virtual Special Meeting, shareholders may also vote during the meeting. Once logged in, you will be able to vote your shares by clicking the “Vote Here!” button.

Shareholders may submit written questions once logged into the virtual Special Meeting platform. Questions pertinent to meeting matters will be answered during the question and answer portion of the virtual Special Meeting, subject to a time limit prescribed by the Rules of Conduct that will be posted to the virtual Special Meeting platform on the day of the meeting. The Rules of Conduct will also provide additional information about the relevancy of questions to meeting matters.

If you encounter any difficulties accessing the virtual Special Meeting during the check-in or meeting time, you should call the technical support number that will be posted on the virtual shareholder meeting login page.

Householding of Proxy Materials

The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more shareholders sharing the same address by delivering a single Notice or Proxy Statement addressed to those shareholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for shareholders and cost savings for companies.

Brokers with account holders who are shareholders may be “householding” our proxy materials. A single Notice or Proxy Statement may be delivered to multiple shareholders sharing an address unless contrary instructions have been received from the affected shareholders. Once you have received notice from your broker that it will be “householding” communications to your address, “householding” will continue until you are notified otherwise or until you notify your broker or the company that you no longer wish to participate in “householding.”

If, at any time, you no longer wish to participate in “householding” and would prefer to receive a separate proxy statement and annual report, you may (1) notify your broker, (2) direct your written request to: Enzo Biochem, Inc., 81 Executive Blvd., Suite 3, Farmingdale, New York 11735, Attention: Secretary, or contact us at (631) 755-5500. Shareholders who currently receive multiple copies of the proxy statement at their address and would like to request “householding” of their communications should contact their broker. In addition, we will promptly deliver, upon written or oral request to the address or telephone number above, a separate copy of the annual report and proxy statement to a shareholder at a shared address to which a single copy of the documents was delivered.

Solicitation of Proxies

In addition to solicitation by mail, our directors, officers and employees may solicit proxies by telephone, other electronic means or in person. These people will not receive any additional compensation for their services, but we will reimburse them for their out-of-pocket expenses. We will reimburse banks, brokers, nominees, custodians and fiduciaries for their reasonable expenses in forwarding copies of this proxy statement to the beneficial owners of shares of our common stock and in obtaining voting instructions from those owners. We will pay the costs of this proxy solicitation, including all expenses of filing, printing and mailing this proxy statement. We have also retained Kingsdale Advisors, a proxy advisory and solicitation firm, to assist with the solicitation of proxies and provide related advice and informational support, for a services fee, plus customary disbursements, which are not expected to exceed $20,000 in total.

Submitting Proxies via Internet or by Telephone

Whether or not you plan to attend the Special Meeting, and regardless of the number of shares of Common Stock you own, please vote as soon as possible. We urge you to date, sign and return the proxy card in the envelope provided to you, or to use the telephone or Internet method of voting described on your proxy card, even if you plan to attend the Special Meeting, so that if you are unable to attend the Special Meeting, your shares can be voted. 

Revocability of Proxies

Any shareholder of record who submits a proxy card retains the right to revoke such proxy card by: (i) submitting a written notice of such revocation to the Chief Executive Officer of the Company so that it is received no later than 5:00 p.m., EDT on [●], 2023; (ii) submitting a duly signed proxy card bearing a later date than the previously signed and dated proxy card to the Chief Executive Officer of the Company so that it is received no later than 5:00 p.m., EDT on [●], 2023; or (iii) attending the Special Meeting virtually and voting thereat the shares represented by such proxy card. Attendance at the Special Meeting will not, in and of itself, constitute revocation of a completed, signed and dated proxy card previously returned. All such later-dated proxy cards or written notices revoking a proxy card should be sent to Enzo Biochem, Inc., 81 Executive Blvd. Suite 3, Farmingdale, New York 11735, Attention: Hamid Erfanian, Chief Executive Officer. If you hold shares of Common Stock in street name, you must contact the firm that holds your shares to change or revoke any prior voting instructions.

Other Business

As of the date of this proxy statement, our Board does not intend to present at the Special Meeting of shareholders any matters other than those described herein and does not presently know of any matters that will be presented by other parties. If any other matter requiring a vote of the shareholders should come before the meeting, it is the intention of the persons named in the proxy to vote with respect to any such matter in accordance with the recommendation of our Board or, in the absence of such a recommendation, in accordance with the best judgment of the proxy holder.

THE ASSET SALE

This discussion of the Asset Sale is qualified by reference to the Asset Purchase Agreement, which is attached to this proxy statement as Annex A. You should read the entire Asset Purchase Agreement carefully as it is the legal document that governs the Asset Sale.

General

Our Board has adopted and approved an Asset Purchase Agreement with the Buyer whereby we will sell substantially all the operating assets and assign certain liabilities of our clinical laboratory business to the Buyer. If the Asset Sale is completed, we may be required to provide certain transition services to the Buyer for up to six months following the closing of the Asset Sale.

Background of the Proposed Sale

Enzo Biochem, Inc. (the “Company”, “we”, “our”, or “Enzo”) is an integrated clinical labs, diagnostics, and life sciences company that was formed in 1976. Our mission is to harness genetic processes in order to develop research tools, provide diagnostic services, and develop enabling technologies for detecting and identifying genes and modifying gene expression. We are focused on delivering and applying advanced technological capabilities to develop reliable products and services for the global community. Our proprietary technology solutions platform is comprised of access to 200,000 products, over 10,000 of which are produced by the Company. Throughout the course of our research and development activities, we have built a significant patent position, consisting of over 450 patents, both domestic and foreign. A pioneer of the industry, we were the first biotechnology company to go public with our initial public offering in June 1980.

Our activities primarily consist of our two operating segments: Enzo Clinical Labs (“ECL”) and Enzo Life Sciences (“ELS”). ECL provides a broad range of clinical laboratory services to hospitals, physicians, researchers, and pharmaceutical companies and offers an extensive menu of clinical laboratory tests and procedures used by physicians to establish or support a diagnosis or monitor treatment and medication. ELS develops and manufactures products for clinical research and drug development customers. Underpinned by extensive technological capabilities, ELS has developed products used in the identification of genomic information by laboratories worldwide.

Between 2020 and 2021, we pursued the potential sale of ECL through an auction run by Cain Brothers, our financial advisor during that process. That auction yielded strong interest from two bidders, one of whom was the Buyer. We initially granted exclusivity to the other bidder, but upon expiration of the exclusivity period with such bidder, we ceased negotiations and entered into exclusivity with the Buyer. By the beginning of 2021, we had been negotiating the purchase and sale of ECL with the Buyer for over six months, at which time we abandoned the potential transaction with the Buyer. We had determined that both bidders failed to put forth acceptable proposals.

As previously disclosed, since the fiscal year ended July 31, 2018, other than during the fiscal years ended July 31, 2021 and 2022, our ECL segment has suffered significant losses or nearly broke even. The exception to this came as a result of the COVID-19 pandemic, which began in March 2020. At the start of the pandemic, the Company made substantial investments to expand and maintain COVID-19 testing for the communities it serves. The Company’s technical expertise in molecular diagnostics allowed it to develop next generation COVID-19 diagnostic and antibody testing options, which were approved under the FDA Emergency Use Authorization (EUA). During the fiscal year ended July 31, 2022, the Company generated substantial COVID-19-related services revenues, representing 44% of all services revenues. The testing revenues had a significantly positive impact on the profitability and cash flow of the ECL segment for most of the fiscal year ending July 31, 2022. Revenues from COVID-19 testing during the three and six months ended January 31, 2022 represented 56% and 52%, respectively of all services revenues.

However, the rate of transmission of COVID-19 and the severity of its variants have dramatically declined in the U.S. over the last year. Increases in vaccination rates and booster shots, the development of new therapeutics and greater availability of rapid COVID-19 tests has resulted in a continued, significant decline in demand for our COVID-19 testing. As a result, volume, revenues, profitability, and cash flow from COVID-19 testing during the current periods were all substantially and materially lower than the prior year period levels. Revenues from COVID-19 testing during the three and six months ended January 31, 2023 represented approximately 4% and 6%, respectively, of all of the Company’s services revenues. Thus, COVID-19 testing is no longer a material part of our ECL business segment. The ECL business segment has subsequently returned to losses and our management and our board of directors expect that the ECL segment will continue to experience losses for the foreseeable future.

At a special meeting held on March 11, 2022, our Board authorized management to pursue various strategic options, including selecting and interviewing appropriate financial advisors to assist us with analyzing potential strategic sale transactions. Between March 11, 2022 and May 27, 2022, we contacted and interviewed six financial advisors that we believed had the requisite experience, particularly in our industry, to advise the Company on our capital needs and potential strategic sale transactions. Leading up to the selection of Jefferies LLC (“Jefferies”) as our financial advisor, our Board met (through in-person or telephonic meetings) on each of March 22, 2022, April 4, 2022, April 7, 2022, April 27, 2022, May 9, 2022, and May 16, 2022, in each case to monitor, deliberate and advise our management on how to proceed in connection with the evaluation of potential strategic sale transactions, and considering alternatives such as raising additional capital and exploring potential asset sales.

On May 16, 2022, our Board proposed, and on July 12, 2022, established a special mergers and acquisitions committee (the “M&A committee”) to oversee and advise management in connection with a potential sale of the ECL business segment. The M&A committee provided our Board with regular updates with respect to a potential sale transaction.

Our Board, in close consultation with our M&A committee, evaluated and discussed potential strategic alternatives for the Company and weighed the diversion of management’s time and effort and expected transaction expenses and costs against the need and desire to enhance shareholder value given our current stock price and future prospects of our businesses including ECL and ELS. Our Board directed management, with the assistance of Jefferies, to focus its efforts on pursuing a potential sale transaction of the ECL business segment in a third-party solicitation process (the “Sale Process”), while also considering future plans with respect to our retained businesses. Between September 2022 and October 2022, our management, with the assistance of Jefferies, prepared confidential information materials (a “CIM”) and identified potential strategic buyers for the ECL business segment. During this time, with the assistance of our advisors, we began preparing for a potential sale transaction and assembling a virtual data room containing due diligence information to be provided to potential counterparties in connection with the Sale Process.

Between October 2022 and December 2022, at the direction of our board of directors, Jefferies contacted a total of 105 potential buyers, consisting of 59 potential strategic parties and 46 financial sponsors that could be interested in acquiring the ECL and ELS business segments. Of the potential buyers, 42 parties executed a confidentiality agreement and received the CIM and a first round process letter in connection with the Sale Process, which directed the parties to submit initial indications of interest by December 14, 2022. During the first half of December 2022, management conducted executive summary presentations with 14 potential buyers and held due diligence calls as requested. At the conclusion of the first round, ten parties conveyed initial indications of interest, and our board of directors determined to progress five parties to the second round of the Sale Process.

Between October 2022 and January 2023, our Board and M&A committee regularly held special meetings during which members of management and representatives of Jefferies provided updates on the Sale Process, including the number of potential buyers contacted in accordance with the directives of our board of directors and any developments following the meetings with potential buyers.

On January 12, 2023, at a meeting of our Board, management updated our board of directors with respect to its efforts in the Sale Process, and Jefferies updated our Board regarding the efforts specifically to sell assets of ECL, as directed and prioritized by our Board, including the potential buyers contacted. Management further updated our Board on the projections of revenue, expenses and cash of each of ECL and ELS.

Following this meeting, with instruction from, and in consultation with, the management team, our legal counsel, McDermott Will & Emery LLP (“McDermott”), began drafting the Asset Purchase Agreement contemplating the sale of the ECL business, which was later made available to potential buyers.

On or around January 15, 2023, a second round process letter was sent to the remaining potential buyers of the assets of ECL in which bidders were directed to submit comments to the draft Asset Purchase Agreement by February 9, 2023 and final bids by February 15, 2023.

As of mid-January 2023 and over the following several weeks, three potential buyers including the Buyer expressed continued interest in acquiring the assets of ECL. During this time, all three potential buyers had site visits and meetings with our management team to facilitate and expedite due diligence. During this time, McDermott negotiated clean team agreements with bidders to facilitate due diligence review in compliance with applicable competition laws.

On January 31, 2023, the Company received an issues list to our auction draft Asset Purchase Agreement from a potential buyer (“Party A”). Over the next few days McDermott and Party A’s counsel discussed the issues list, in particular such Party A’s termination rights and the minimum-volume closing condition, among other terms. Between February 9, 2023 and February 10, 2023, the Company received comments to the draft Asset Purchase Agreement from Party A and the Buyer. Over the next several days, representatives of McDermott discussed these comments with management, evaluating the critical legal and business issues raised by each bidder’s draft of the Asset Purchase Agreement, which issues included (in addition to those noted above) the scope of assumed and excluded assets and liabilities, the survival of representations and warranties, and post-closing indemnification. Over the next few days, representatives of McDermott discussed these and other issues with each Party A’s and Buyer’s respective counsel. Jefferies also provided our board of directors with disclosure regarding certain material investment banking relationships during the prior two-year period with the three remaining bidders, including the Buyer with which no such material investment banking relationships were indicated.

On February 15, 2023, we received three final bids from the remaining interested buyers of the assets of ECL, including the Buyer. The Buyer and Party A submitted updated draft letters of intent and markups of the Asset Purchase Agreement (as discussed above) and a third bidder submitted only an updated draft letter of intent. Following execution of clean team agreements, we provided clean room data room access to selected personnel of each bidder. The clean room contents included fee schedules, an employee census and revenue reports.

On February 17, 2023, our Board held a meeting to consider developments in the Sale Process and discuss the terms of the transaction as proposed by each of the final bidders. At the meeting, management and representatives of McDermott outlined the terms of each bidder’s proposed letter of intent and discussed Party A’s and the Buyer’s markups of the Asset Purchase Agreement (noted above). In particular, our counsel outlined key provisions of the draft Asset Purchase Agreement, including the issues described above, the expectation that the Buyer would have negotiated post-closing employment arrangements with certain key employees of ECL prior to signing the Asset Purchase Agreement, the limitation on Buyer’s efforts to obtain HSR approval or to assume all required filing fees, a closing condition requiring the delivery of landlord consents, the Company’s obligation to compensate the Buyer for expenses under certain circumstances, the scope of the Company’s post-closing restrictive covenants and the possibility of post-closing transition services. After comprehensive evaluations of all critical aspects of the transactions proposed by each of the final bidders, our Board authorized management to enter into an exclusivity period as requested by the Buyer. It was noted that the Buyer’s proposal was superior among the ECL bidders from a financial and deal certainty perspective.

Between February 25, 2023 and March 16, 2023, our management had a series of calls with the Buyer and its legal and financial advisors to discuss the potential sale transaction and related matters, including ongoing due diligence, the scope of the purchased assets and excluded liabilities, adjustments to the purchase price and relevant deal terms, regulatory considerations that would impact deal certainty, the timing and logistics around the transfer of customer accounts and employees and post-closing transition services. Based on contemporaneous discussions with the Buyer, our management repeatedly directed McDermott to make revisions to the Asset Purchase Agreement, in each case with the intent of enhancing shareholder value and achieve deal certainty. In tandem, McDermott actively engaged with the Buyer’s legal counsel to negotiate legal terms and drafting points and exchanged successive drafts of the Asset Purchase Agreement during that time.

Between March 5, 2023 and March 10, 2023, McDermott and the Buyer’s counsel discussed closing deliverables and post-closing covenants.

The Buyer’s final bid required a two-week exclusivity period which expired on March 6, 2023. On March 6, 2023, as the parties continued to negotiate in good faith, we and Buyer agreed to extend the exclusivity agreement through March 9, 2023 and then again through March 16, 2023 to allow additional time to finalize the Asset Purchase Agreement. 

Between March 9, 2023 and March 16, 2023, we and the Buyer exchanged multiple revised drafts of the Asset Purchase Agreement. During such time, we and McDermott continued to have numerous internal discussions and conversations with the Buyer and its counsel with respect to the remaining open points in the Asset Purchase Agreement, including the scope of purchased and excluded assets and liabilities, the scope and timing of our obligations contemplated by the Asset Purchase Agreement, the scope of fundamental representations, the scope of closing deliverables, our interim operating covenants, the treatment of certain intellectual property, and Buyer’s intent to offer employment to certain of our employees.

Throughout the Sale Process, the M&A committee met regularly to discuss the status, progress and developments affecting the Sale Process and updated our board of directors contemporaneously (as discussed above) with respect to the same. These meetings were held on February 22, 2023, February 23, 2023, March 1, 2023, March 2, 2023, March 5, 2023, March 7, 2023, March 12, 2023, March 13, 2023, March 15, 2023, and March 16, 2023.

On March 14, 2023, our Board met with our management and legal and financial advisors to receive an update regarding, and to discuss, the proposed Asset Sale. In advance of this meeting, Jefferies provided its preliminary financial analysis of the proposed Purchase Price to our board of directors.

On March 15, 2023, at a special meeting of our Board held to discuss the latest developments with respect to the potential transaction with the Buyer, our board of directors again reviewed the overall Sale Process as conducted to date.

Our management and representatives of McDermott then provided an overview of the negotiations with the Buyer and summarized key terms of the proposed Asset Purchase Agreement, including the resolution of outstanding open points thereunder, such as the breakup fee, the closing conditions and deliverables, and the survival of indemnification obligations. Representatives of McDermott and members of management updated our Board with respect to the expected timing and conditions to closing (and potential exposure and related risks), post-closing transition services and related matters.

Also at this meeting, Jefferies reviewed its financial analysis of the Purchase Price with the Board and rendered an oral opinion, confirmed by delivery of a written opinion dated March 15, 2023, to the Board to the effect that, as of that date and based on and subject to various assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken by Jefferies, the Purchase Price to be received for the Business in the Asset Sale pursuant to the Asset Purchase Agreement was fair, from a financial point of view, to the Company.

After carefully considering the various factors described under the section captioned “—Reasons for the Asset Sale and Recommendation of our Board of Directors,” our Board then approved entry into the Asset Purchase Agreement by majority vote. Mr. Erfanian, Mr. Radoff, Dr. Walters and Dr. Tagliaferri voted in favor of approving our entry into the Asset Purchase Agreement, and Dr. Rabbani abstained.

On March 16, 2023, the Company and the Parent executed the Asset Purchase Agreement with the Buyer and

issued a press release announcing the Asset Sale.

Reasons for the Asset Sale and Recommendation of Our Board of Directors

Our Board: (i) determined that the Asset Sale is fair, advisable and in the best interests of us and our shareholders (ii) approved the Asset Purchase Agreement and the Asset Sale, and (iii) recommends that our shareholders vote in favor of the approval of the Asset Sale and adoption of the Asset Purchase Agreement.

In evaluating the Asset Sale, our Board consulted with our management and legal and financial advisors and, in the course of reaching that determination and recommendation, our Board considered a number of potentially supportive factors in its deliberations including:

In the course of its deliberations, our Board also considered a variety of risks and other countervailing factors, including:

The foregoing discussion of the factors considered by our Board is not intended to be exhaustive, but does set forth material factors considered by our Board. Our Board reached the conclusion to approve and adopt the Asset Purchase Agreement in light of the various factors described above and other factors that each member of our Board felt were appropriate. In view of the wide variety of factors considered by our Board in connection with its evaluation of the Asset Sale and the complexity of these matters, our Board did not consider it practical, and did not attempt to quantify, rank or otherwise assign relative weights to the specific factors it considered in reaching its decision and did not undertake to make any specific determination as to whether any particular factor, or any aspect of any particular factor, was favorable or unfavorable to the ultimate determination of our Board. Rather, our board of directors made its recommendation based on the totality of information presented to it and the investigation conducted by it. In considering the factors discussed above, individual directors may have given different weights to different factors.

After evaluating these factors, our Board determined that the Asset Purchase Agreement was fair to and in the best interests of, our shareholders. Accordingly, our Board adopted and approved the Asset Purchase Agreement. Our Board recommends that you vote “FOR” the Asset Sale Proposal.

Opinion of the Company’s Financial Advisor

The Company has retained Jefferies as financial advisor to the Company in connection with the proposed Asset Sale. In connection with this engagement, the Company requested that Jefferies evaluate the fairness, from a financial point of view, to the Company of the Purchase Price to be received for the Business in the Asset Sale pursuant to the Asset Purchase Agreement. At a meeting of the Board held on March 15, 2023, Jefferies rendered an oral opinion, confirmed by delivery of a written opinion dated March 15, 2023, to the Board to the effect that, as of such date and based on and subject to the various assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken by Jefferies, the Purchase Price to be received for the Business in the Asset Sale pursuant to the Asset Purchase Agreement was fair, from a financial point of view, to the Company.

The full text of Jefferies’ opinion, which describes the various assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken by Jefferies, is attached as Annex B to this proxy statement and is incorporated herein by reference. Jefferies’ opinion was provided for the use and benefit of the Board (in its capacity as such) in its evaluation of the Purchase Price from a financial point of view to the Company and did not address any other aspect of the Asset Sale or any other matter. Jefferies’ opinion did not address the relative merits of the Asset Sale or other transactions contemplated thereby as compared to any alternative transaction or opportunity that might be available to the Company or the Seller or with respect to the Business, nor did it address the underlying business decision by the Company to engage in the Asset Sale. Jefferies’ opinion does not constitute a recommendation as to how the Board, any securityholder or any other party should vote or act with respect to the Asset Sale or any other matter. The following summary is qualified in its entirety by reference to the full text of Jefferies’ opinion.

In arriving at its opinion, Jefferies, among other things:

In its review and analysis and in rendering its opinion, Jefferies assumed and relied upon, but did not assume any responsibility to independently investigate or verify, the accuracy and completeness of all financial and other information that was supplied or otherwise made available by or on behalf of the Company or that was publicly available to Jefferies (including, without limitation, the information described above) or otherwise reviewed by Jefferies. Jefferies relied on assurances of the management and other representatives of the Company that they were not aware of any facts or circumstances that would make such information incomplete, inaccurate or misleading. Jefferies did not make or obtain an independent evaluation or appraisal of or relating to any of the assets or liabilities (contingent, accrued, derivative, off-balance sheet or otherwise), nor did Jefferies conduct a physical inspection of any of the properties or facilities, of the Business or any entity, and Jefferies assumed no responsibility to obtain or conduct any such evaluations, appraisals or physical inspections. Jefferies also did not evaluate the solvency of the Business or any entity under any state or federal laws relating to bankruptcy, insolvency or similar matters. In addition, Jefferies’ analyses and opinion did not consider any actual or potential arbitration, litigation, audits, claims or possible unasserted claims, investigations or other proceedings involving or affecting the Business or any entity.

Jefferies was advised that there were no audited standalone financial statements relating solely to the Business and assumed that if such financial statements were available, they would not reflect any information that would be meaningful in any respect to Jefferies’ analyses or opinion. Jefferies also assumed that there were no material changes in the assets or liabilities associated with, or in the financial condition or prospects of, the Business since the dates on which financial and other information relating to the Business were last made available to Jefferies that would be meaningful in any respect to Jefferies’ analyses or opinion. With respect to the financial forecasts and estimates provided to and reviewed by Jefferies, Jefferies noted that projecting future results of any company or business is inherently subject to uncertainty. However, Jefferies was advised, and Jefferies assumed, that the financial forecasts and estimates relating to the Business that Jefferies was directed to utilize for purposes of its analyses and opinion were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of the management of the Company as to, and were an appropriate basis upon which to evaluate, the future financial performance of the Business and the other matters covered thereby. Jefferies expressed no opinion as to any financial forecasts or estimates or the assumptions on which they were based.

Jefferies relied upon the assessments of the management of the Company as to, among other things, (i) the potential impact on the Business of market, competitive, seasonal, macroeconomic and other conditions, trends and developments in and prospects for, and governmental, regulatory and legislative matters relating to or otherwise affecting, the clinical lab services industry, including healthcare reform regulations and changes in healthcare reimbursement models and products, government payment and reimbursement systems and third-party payor policies, (ii) implications of the global COVID-19 pandemic on the Business, (iii) the ability to operate, secure leases and maintain sufficient patient service centers and other facilities for the operations of the Business, (iv) required certifications and licenses for, and the technology and other intellectual property utilized in, the Business and associated risks, including the validity and duration of such certifications, licenses, technology and other intellectual property, and (v) existing and future agreements and other arrangements involving, and ability to attract, retain and/or replace, key employees, customers, suppliers and other commercial relationships relating to the Business. Jefferies assumed that there would not be any developments with respect to any such matters, or any adjustments to or allocations of the Purchase Price, that would have an adverse effect on the Business or the Asset Sale or that otherwise would be meaningful in any respect to Jefferies’ analyses or opinion. Jefferies also assumed that the full escrowed portion of the Purchase Price would be received by the Seller in connection with the Asset Sale.

Jefferies’ opinion was based on economic, monetary, regulatory, market and other conditions existing, and which could be evaluated, as of the date of Jefferies’ opinion. Jefferies expressly disclaimed any undertaking or obligation to advise any person of any change in any fact or matter affecting its opinion of which Jefferies becomes aware after the date of its opinion. As the Board was aware, the credit, financial and stock markets, and the industry in which the Business operates, have experienced and may continue to experience volatility and Jefferies expressed no view or opinion as to any potential effects of such volatility on the Business or the Asset Sale.

Jefferies made no independent investigation of, and Jefferies expressed no view or opinion as to, any legal, regulatory, accounting or tax matters affecting or relating to the Business or the Asset Sale and Jefferies assumed the correctness in all respects meaningful to its analyses and opinion of all legal, regulatory, accounting and tax advice given to the Company and/or the Board, including, without limitation, with respect to changes in, or the impact of, accounting standards or tax and other laws, regulations and governmental and legislative policies affecting the Business or the Asset Sale and legal, regulatory, accounting and tax consequences to the Company or its securityholders or to the Seller of the terms of, and transactions contemplated by, the Asset Purchase Agreement and related documents. Jefferies assumed that the Asset Sale would be consummated in accordance with its terms without waiver, modification or amendment of any material term, condition or agreement and in compliance with all applicable laws, documents and other requirements and that, in the course of obtaining the necessary governmental, regulatory or third-party approvals, consents, waivers and releases for the Asset Sale or otherwise, including with respect to any divestitures or other requirements, no delay, limitation, restriction or condition would be imposed or occur that would have an adverse effect on the Business or the Asset Sale or that otherwise would be meaningful in any respect to Jefferies’ analyses or opinion. Jefferies also assumed that appropriate indemnification and other arrangements or provisions had been or would be made in respect of liabilities to be assumed by the Buyer in connection with the Asset Sale and that neither the Company nor the Seller would directly or indirectly incur or retain any liabilities or other obligations that were contemplated to be excluded from the Asset Sale or otherwise. Jefferies further assumed that the final Asset Purchase Agreement, when signed by the parties thereto, would not differ from the draft reviewed by Jefferies in any respect meaningful to Jefferies’ analyses or opinion.

Jefferies’ opinion did not address the relative merits of the Asset Sale or other transactions contemplated thereby as compared to any alternative transaction or opportunity that might be available to the Company or the Seller or with respect to the Business, nor did it address the underlying business decision by the Company to engage in the Asset Sale or the terms of the Asset Purchase Agreement or related documents, including the form or structure of the Purchase Price or the Asset Sale, any adjustments to or allocations of the Purchase Price or any term, aspect or implication of any indemnification, escrow or ticking fee arrangements, any voting, transition services, intellectual property or other ancillary agreements or any other agreement, arrangement or understanding entered into in connection with, or contemplated by or resulting from, the Asset Sale or otherwise. Jefferies’ opinion was limited to the fairness, from a financial point of view and as of the date of such opinion, to the Company of the Purchase Price (to the extent expressly specified in such opinion). Jefferies was not asked to, and Jefferies’ opinion did not, address the fairness, financial or otherwise, of any consideration to the holders of any class of securities, creditors or other constituencies of the Company or any other party. Furthermore, Jefferies did not express any view or opinion as to the fairness, financial or otherwise, of the amount or nature of any compensation or other consideration payable to or to be received by any officers, directors or employees, or any class of such persons, in connection with the Asset Sale relative to the Purchase Price or otherwise. Jefferies also expressed no view or opinion as to the prices at which the securities of the Company may trade or otherwise be transferable at any time, including following announcement or consummation of the Asset Sale. The issuance of Jefferies’ opinion was authorized by the Fairness Committee of Jefferies LLC.

In connection with rendering its opinion to the Board, Jefferies performed a variety of financial and comparative analyses, including those described below. The following summary is not a complete description of all analyses performed and factors considered by Jefferies in connection with its opinion. The preparation of a financial opinion is a complex process involving subjective judgments and is not necessarily susceptible to partial analysis or summary description. With respect to the selected public companies and selected precedent transactions analyses summarized below, no company or transaction used as a comparison was identical or directly comparable to the Business or the Asset Sale. These analyses necessarily involved complex considerations and judgments concerning financial and operating characteristics and other factors that could affect the public trading, acquisition or other values of the companies or transactions concerned.

Jefferies believes that its analyses and the summary below must be considered as a whole and in context and that selecting portions of its analyses and factors or focusing on information presented in tabular format, without considering all analyses and factors or the narrative description of the analyses, could create a misleading or incomplete view of the processes underlying Jefferies’ analyses and opinion. Jefferies did not draw, in isolation, conclusions from or with regard to any one factor or method of analysis for purposes of its opinion, but rather arrived at its ultimate opinion based on the results of all analyses undertaken by it and assessed as a whole.

The estimates of the future performance of the Business in or underlying Jefferies’ analyses are not necessarily indicative of future results or values, which may be significantly more or less favorable than those estimates. In performing its analyses, Jefferies considered industry performance, general business and economic conditions and other matters, many of which were beyond the control of the Company. Estimates of the financial value of companies do not purport to be appraisals or necessarily reflect the prices at which companies or securities actually may be sold or acquired. Accordingly, the estimates used in, and the implied reference ranges resulting from, any particular analysis described below are inherently subject to substantial uncertainty and should not be taken as Jefferies’ view of the actual value of the Business or its assets.

The Purchase Price was determined through negotiations between the Company and the Buyer, and the decision of the Company to enter into the Asset Purchase Agreement was solely that of the Board. Jefferies’ opinion and financial analyses were only one of many factors considered by the Board in its evaluation of the Purchase Price and should not be viewed as determinative of the views of the Board or the Company’s management with respect to the Asset Sale or the consideration payable in the Asset Sale.

Financial Analyses

The summary of the financial analyses described in this section entitled “—Financial Analyses” is a summary of the material financial analyses reviewed with the Board and performed by Jefferies in connection with its opinion. The financial analyses summarized below include information presented in tabular format. In order to fully understand Jefferies’ financial analyses, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. Considering the data below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of Jefferies’ financial analyses. Except as otherwise noted, financial data utilized for the Business in the financial analyses described below was based on financial forecasts and estimates relating to the Business and its operations and prospects on a standalone basis provided to or discussed with Jefferies by the management of the Company.

Selected Public Companies Analysis. Jefferies reviewed publicly available financial, stock market and operating information relating to the Business and the following seven selected companies that Jefferies viewed as generally relevant for purposes of analysis as publicly traded companies with operations in the clinical lab services industry (collectively referred to in this section as the “selected companies”):

Jefferies reviewed, among other information, enterprise values, calculated as fully-diluted equity values based on closing stock prices on March 14, 2023 (or, in the case of SYNLAB AG, its unaffected closing stock price on March 10, 2023, the last trading day prior to public announcement of the receipt by SYNLAB AG of a non-binding acquisition proposal) plus total debt, non-controlling interests and preferred equity (as applicable) and less cash and cash equivalents and short-term investments, as a multiple of calendar year 2023 and calendar year 2024 estimated revenue. Financial data of the selected companies were based on publicly available Wall Street research analysts’ estimates, public filings and other publicly available information. Financial data of the Business was based on the Company management’s forecasts and other estimates, calendarized for comparative purposes.

The overall low to high calendar year 2023 and calendar year 2024 estimated revenue multiples observed for the selected companies were 0.9x to 2.1x (with a median of 1.6x) and 0.8x to 2.1x (with a median of 1.6x), respectively. Jefferies then applied selected ranges of calendar year 2023 and calendar year 2024 estimated revenue multiples derived from the selected companies of 1.1x to 2.1x and 1.1x to 2.1x, respectively, to corresponding data of the Business.

This analysis indicated the following approximate implied enterprise value reference ranges for the Business, as compared to the Purchase Price:

Selected Precedent Transactions Analysis. Using publicly available information, Jefferies reviewed financial data relating to the following 11 selected transactions that Jefferies viewed as generally relevant for purposes of analysis as transactions involving target companies with operations in the clinical lab services industry (collectively referred to in this section as the “selected transactions”):

Jefferies reviewed, among other information, transaction values of the selected transactions, calculated as the enterprise values implied for the target companies involved in the selected transactions based on the consideration paid or payable in the selected transactions, as a multiple of the latest 12 months revenue of the target companies (excluding COVID-19 related revenue, as applicable, to the extent publicly available) as of the announcement date of the applicable selected transaction. Financial data of the selected transactions were based on publicly available Wall Street research analysts’ estimates, public filings and other publicly available information. Financial data of the Business was based on the Company management’s forecasts and estimates, calendarized for comparative purposes.

The overall low to high latest 12 months revenue multiples observed for the selected transactions was 0.7x to 3.2x (with a median of 1.7x). Jefferies then applied a selected range of latest 12 months revenue multiples derived from the selected transactions of 1.2x to 2.2x to the latest 12 months (as of March 31, 2023) estimated non-COVID-19 related revenue of the Business.

This analysis indicated the following approximate implied enterprise value reference range for the Business, as compared to the Purchase Price:

Discounted Cash Flow Analysis. Jefferies performed a discounted cash flow analysis of the Business by calculating the estimated present value of the standalone unlevered, after-tax free cash flows that the Business was forecasted to generate during the fiscal years ending July 31, 2023 through July 31, 2027 based on the Company management’s forecasts and other estimates. Implied terminal values for the Business were calculated by applying to the fiscal year 2027 estimated revenue of the Business a selected range of revenue multiples of 1.2x to 2.2x. The present values (as of March 31, 2023) of the cash flows and terminal values were then calculated using a selected range of discount rates of 12.5% to 13.5%. This analysis indicated the following approximate implied enterprise value reference range for the Business, as compared to the Purchase Price:

Miscellaneous

The Company has agreed to pay Jefferies for its financial advisory services in connection with the proposed Asset Sale an aggregate fee of approximately $3.0 million, of which a portion was payable upon delivery of Jefferies’ opinion to the Board and approximately $2.3 million is payable contingent upon consummation of the Asset Sale. In addition, the Company has agreed to reimburse Jefferies for Jefferies’ expenses, including fees and expenses of counsel, incurred in connection with Jefferies’ engagement and to indemnify Jefferies and related parties against certain liabilities, including liabilities under federal securities laws, arising out of or in connection with the services rendered and to be rendered by Jefferies under its engagement.

As the Board was aware, Jefferies also currently is acting as financial advisor to the Company in connection with its strategic review and related matters, for which services Jefferies expects to receive an aggregate fee of approximately $2.0 million from the Company, and Jefferies and its affiliates in the future may provide other financial advisory services or financing services to the Company and/or its affiliates, for which services Jefferies and/or its affiliates would expect to receive compensation. As the Board also was aware, although Jefferies and its affiliates had not provided financial advisory or financing services to the Buyer during the two-year period prior to the date of Jefferies’ opinion for which Jefferies and its affiliates received compensation, Jefferies and its affiliates may in the future provide such services to the Buyer and/or its affiliates, for which services Jefferies and its affiliates would expect to receive compensation. In the ordinary course of business, Jefferies and its affiliates may trade or hold securities or financial instruments (including loans and other obligations) of the Company, the Buyer and/or their respective affiliates for Jefferies’ own account and for the accounts of Jefferies’ customers and, accordingly, may at any time hold long or short positions or otherwise effect transactions in those securities or financial instruments.

Jefferies was selected as the Company’s financial advisor in connection with the Asset Sale because, among other things, Jefferies is an internationally recognized investment banking firm with substantial experience in merger and acquisition transactions and based on its familiarity with the Company and its businesses and industry. Jefferies is regularly engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, leveraged buyouts, negotiated underwritings, competitive bids, secondary distributions of listed and unlisted securities and private placements.

Past Contacts, Transactions or Negotiations

The Company has two pre-existing commercial relationships with the Buyer. First, the Buyer is one of our frequently used reference labs. Second, on October 17, 2022, we entered into a STAT Services Agreement (as amended on March 16, 2023) with the Buyer pursuant to which we perform certain testing services for the Buyer. Other than as described herein or under “Background of the Proposed Sale” above, neither the Company nor any of its subsidiaries has had any negotiations, transactions or material contacts during the past two years with the Buyer, and other than as described under “Background of the Proposed Sale” above or set forth in the Asset Purchase Agreement (and the other agreements contemplated thereby), there are no present or proposed material agreements, arrangements, understandings or relationships between the Company’s executive officers, directors or affiliates, on the one hand, and any of the Buyer’s executive officers, directors or affiliates, on the other hand.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

(in thousands, except share and per share data)

The following unaudited pro forma condensed consolidated financial information is based upon the historical consolidated statements of Enzo Biochem, Inc., a New York corporation (the “Company”), adjusted to give effect to the sale (the “Asset Sale”) of substantially all the operating assets and assign certain liabilities of the Company’s clinical laboratory business (the “Business”) in accordance with the Asset Purchase Agreement dated March 16, 2023 (the “Asset Purchase Agreement”) between the Company, Enzo Clinical Labs, Inc., a New York corporation (the “Seller”), and Laboratory Corporation of America Holdings, a Delaware corporation (the “Buyer”). These unaudited pro forma condensed consolidated financial statements are derived from, and should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended July 31, 2022 filed with the United States Securities and Exchange Commission (the “SEC”) on October 14, 2022 as amended on November 24, 2022, and the Quarterly Report on Form 10-Q for the interim period ended January 31, 2023, filed with the SEC on March 20, 2023.

The unaudited pro forma condensed consolidated balance sheet gives effect to the proposed Asset Sale as if it had occurred on January 31, 2023. The estimated cash proceeds and impact of the resulting gain are only included in the January 31, 2023 unaudited pro forma condensed consolidated balance sheet. The unaudited pro forma condensed consolidated statements of operations for the six months ended January 31, 2023 and the years ended July 31, 2022 and 2021 give effect to the proposed Asset Sale as if it had occurred on August 1, 2020.

The pro forma adjustments related to the sale of the Business are based on available information and assumptions that management believes are (1) directly attributable to the Asset Sale; (2) factually supportable; and (3) with respect to the unaudited pro forma condensed consolidated statements of operations, expected to have a continuing impact on consolidated operating results. Certain of the most significant assumptions are set forth under the Notes to Unaudited Pro Forma Condensed Consolidated Financial Information.

We have included the following unaudited pro forma condensed consolidated financial information solely for the purpose of providing shareholders with information that may be useful for purposes of considering and evaluating the proposal to approve the Asset Sale. The unaudited pro forma condensed consolidated financial information is not necessarily indicative of the results of operations or financial position that might have been achieved for the dates or periods indicated, nor is it indicative of the results of operations or financial position that may occur in the future. Furthermore, the pro forma adjustments may differ from those that will be calculated for purposes of reporting discontinued operations in future filings. The Company cautions shareholders that its future results of operations, including uses of cash and financial position, may significantly differ from those described in these unaudited pro forma condensed consolidated financial statements, and accordingly, these unaudited pro forma condensed consolidated financial statements should be read in conjunction with the disclosures in the proxy statement to which they are attached regarding the nature of the Company’s business following completion of the transactions contemplated by the Asset Purchase Agreement.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

As of January 31, 2023

(in thousands, except share and per share data)

The accompanying notes are an integral part of these unaudited pro forma condensed consolidated financial statements.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the six months ended January 31, 2023

(in thousands, except share and per share data)

The accompanying notes are an integral part of these unaudited pro forma condensed consolidated financial statements.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the year ended July 31, 2022

(in thousands, except share and per share data)

The accompanying notes are an integral part of these unaudited pro forma condensed consolidated financial statements.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the year ended July 31, 2021

(in thousands, except share and per share data)

The accompanying notes are an integral part of these unaudited pro forma condensed consolidated financial statements.

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

(in thousands, except share and per share data)

On March 16, 2023, Enzo Biochem, Inc., a New York corporation (the “Company”), Enzo Clinical Labs, Inc., a New York corporation (the “Seller”) entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Laboratory Corporation of America Holdings, a Delaware corporation (the “Buyer”). Pursuant to the Asset Purchase Agreement, the Seller has agreed to sell substantially all the operating assets and assign certain liabilities of its clinical laboratory business (the “Business”) to the Buyer in exchange for approximately $146.0 million in cash, on and subject to the terms and conditions set forth therein (such transaction, the “Asset Sale”). The purchase price remains subject to adjustment pursuant to the terms of the Asset Purchase Agreement.

The preparation of the unaudited pro forma consolidated financial information is based on financial statements prepared in accordance with accounting principles generally accepted in the United States. The pro forma adjustments reflected in the accompanying unaudited pro forma consolidated financial information reflect estimates and assumptions that we believe to be directly attributable to the Asset Sale, as further described in this proxy statement, and factually supportable. Actual results may differ from those estimates.

The unaudited pro forma consolidated financial information is provided for illustrative purposes only and does not purport to represent what the actual results of operations would have been had the Asset Sale occurred on the respective dates assumed, nor is it necessarily indicative of our future operating results. The unaudited pro forma consolidated financial information and the accompanying unaudited notes should be read in conjunction with our consolidated financial statements and notes thereto included by reference in this proxy statement.

The pro forma adjustments are based on the Company’s preliminary estimates and assumptions which are subject to change. The following pro forma adjustments, related to the proposed Asset Sale, are included in the unaudited pro forma condensed consolidated balance sheet and/or the unaudited pro forma condensed consolidated statements of operations.

The actual after-tax gain will be a different amount. Management expects to utilize substantially all of the Company’s historical tax attributes to offset a substantial portion of its taxable income arising from the Asset Sale. The estimated income taxes resulting from the Asset Sale are reflected as an adjustment to the accrued liabilities in the unaudited pro forma condensed consolidated balance sheet; however, the estimated after-tax gain on the Asset Sale has not been reflected in the unaudited pro forma condensed consolidated statements of operations as it is considered to be nonrecurring in nature.

Certain Effects of the Asset Sale

If the shareholders approve the Asset Purchase Agreement and the closing occurs the, we may be requested by the Buyer to continue certain activities during the Transition Period. Services are to be proposed by the Buyer and agreed upon by the parties. In addition, for a period of five years after the closing of the Asset Sale, we agreed not to engage in any business activity that competes with the Business as conducted on the signing or closing date in New York, New Jersey and Connecticut, use names licensed to Buyer in any business that competes with the Business, or use certain trade names or certain other confusingly similar trade names in connection with any business of any kind.

Effects on the Company if the Asset Sale is Not Completed

The Asset Purchase Agreement includes customary termination provisions for both the Company and Buyer and provides that, in connection with the termination of the Asset Purchase Agreement under specified circumstances, including termination by the Company to accept and enter into a definitive agreement with respect to an unsolicited superior proposal, the Company will be required to pay Buyer a termination fee of $5,000,000, or reimbursement of Buyer’s expenses of up to $5,000,000. If the Asset Sale is not completed, our Board, in discharging its fiduciary obligations to our shareholders, will evaluate other strategic alternatives that may be available, which alternatives may not be as favorable to our shareholders as the Asset Sale and may include a bankruptcy and liquidation of the Company.

Interests of Certain Persons in the Asset Sale

In considering the recommendation of our Board with respect to the Asset Purchase Agreement, holders of shares of our common stock should be aware that our executive officers and directors may have interests in the Asset Sale that may be different from, or in addition to, those of our shareholders generally. These interests may create potential conflicts of interest. Our board was aware of these potential conflicts of interest and considered them, among other matters, in reaching its decision to approve the Asset Purchase Agreement and to recommend that our shareholders vote in favor of the Asset Sale Proposal.

Stockholdings

The following table shows the aggregate number of shares of our common stock held, as of April 5, 2023, by each person who served as a director or executive officer of us at any time since the beginning of our last fiscal year.

Bonus Compensation

Summary Compensation Table

The following table sets forth summary information concerning compensation which will be paid to our named executive officers upon the closing of the Asset Purchase Agreement.

Former executive and current director Elazar Rabbani, Ph.D., and former executive David Bench will not receive any special compensation benefits upon the closing of the Asset Purchase Agreement.

Current independent directors Radoff, Tagliaferri, and Walters will not receive any special compensation benefits upon the closing of the Asset Purchase Agreement.

Indemnification of Officers and Directors

We have entered into indemnification agreements with each of our current directors and executive officers. These agreements require us to indemnify these individuals to the fullest extent permitted under New York law against liabilities that may arise by reason of their service to us, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified.

Regulatory Matters

General

The Company and the Buyer have agreed to promptly as possible use their respective commercially reasonable efforts to obtain, or cause to be obtained, all consents and orders from all applicable governmental authorities and make, or cause to be made, all filings required by any applicable law that may be or become necessary for execution and delivery of the Asset Purchase Agreement and the performance of their respective obligations thereunder. The Company and the Buyer have agreed to cooperate with each other to promptly seek to obtain all such other consents and orders that are required to be made by any applicable law and not willfully take any action that will have the effect of delaying, impairing or impeding the receipt of any required consents and orders that are required to be made by such applicable law. This includes, to the extent required by any applicable law and, if so required, in no event later than ten business days following the signing date of the Asset Purchase Agreement: (i) filing with the Federal Trade Commission (“FTC”) and the Department of Justice (“DOJ”) the notification and report form required for the Asset Sale and any supplemental information requested in connection therewith pursuant to the HSR, (ii) furnishing to each other such necessary information and reasonable assistance as the other may request in connection with their respective preparation of any filing or submission which is necessary under the HSR, (iii) keeping each other apprised of the status of any communications with, and any inquiries or requests for additional information from, the FTC and the DOJ, (iv) promptly complying with any such inquiry or request, and (v) using their commercially reasonable efforts to obtain any clearance required under the HSR for the Asset Sale.

Although we expect that all required regulatory clearances and approvals will be obtained, we cannot assure that these regulatory clearances and approvals will be timely obtained or obtained at all, or that the granting of these regulatory clearances and approvals will not involve the imposition of additional conditions on the closing.

At any time before or after the consummation of the Asset Sale, notwithstanding the expiration or termination of any applicable waiting periods, the FTC or the DOJ, could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the consummation of the merger, seeking divestiture of substantial assets of the parties or requiring the parties to license, or hold separate, assets or terminate existing relationships and contractual rights. In addition, at any time before or after the closing, notwithstanding the expiration or termination of the applicable waiting period under the HSR or the equivalent in any foreign jurisdictions, non-U.S. regulatory bodies and U.S. state attorneys general could take action under other applicable regulatory laws as they deem necessary or desirable in the public interest. Such action could include seeking to enjoin consummation of the Asset Sale or seeking divestiture of substantial assets of the parties. Private parties may also seek to take legal action under the antitrust laws under certain circumstances.

U.S. Antitrust

Under the HSR and the rules promulgated thereunder, the Asset Sale cannot be completed until the Company and the Buyer each file a notification and report form with the FTC and the DOJ, and the applicable waiting period thereunder has expired or been terminated. The parties made the filings required under the HSR on March 30, 2023, and the waiting period under the HSR expires May 1, 2023, at 11:59 p.m. Eastern time.

Other than obtaining HSR approval, neither the Company nor the Buyer is aware of any material federal, state or foreign regulatory approvals required to be obtained, or waiting periods required to expire, to execute the Asset Purchase Agreement or consummate the Asset Sale. If the parties discover that other approvals or filings and waiting periods are necessary, they will seek to obtain or comply with them, although, as is the case with the regulatory approvals described herein, there can be no assurance that they will be obtained on a timely basis, if at all.

Dissenters’ Rights

Under Sections 623 and 910 of the New York Business Corporation Law (the “NYBCL”), you have the right to file a written objection including a notice of election to dissent to the Asset Sale and demand payment of the “fair value” of your shares of the Company. If you intend to dissent and demand payment of the “fair value” of your shares, you must comply with the provisions of Section 623 of the NYBCL in order to receive payment for your shares. We will require strict compliance with the statutory procedures by any shareholder wishing to exercise their dissenters’ rights.

The following briefly summarizes the material provisions of the New York statutory procedures you must follow if you wish to dissent from the Asset Sale and receive payment of the “fair value” of your shares. Because such “fair value” could potentially be determined in a judicial proceeding, the outcome of which cannot be predicted, there is no guarantee that shareholders exercising dissenters’ right would receive an amount per share equal to or greater than the amount that shareholders may receive through a public or private sale of shares of the Company.

This summary, however, is not a complete statement of all applicable requirements and is qualified in its entirety by reference to Sections 623 and 910 of the NYBCL, the full text of which appears in Annex C of this proxy statement.

This proxy statement constitutes the Company’s notice to its shareholders of the availability of dissenters’ rights in connection with the Asset Sale in compliance with the requirement of Section 623 of the NYBCL. Dissenters’ rights are available to holders of shares of Common Stock of the Company. If you wish to consider exercising your dissenters’ rights, you should carefully review the text of Section 623 of the NYBCL contained in Annex C because failure to timely and properly comply with the requirements of Section 623 will result in the loss of your rights under the NYBCL. In view of the complexity of Section 623 of the NYBCL, shareholders who may wish to dissent from the Asset Sale and pursue dissenters’ rights should consult their own legal advisors to ensure that they fully and properly comply with the requirements of Section 623 of the NYBCL.

If you elect to dissent, you must satisfy the conditions stated below.

Notice of Election to Dissent

Section 623 of the NYBCL requires that if you intend to enforce your right to dissent in connection with the Asset Sale, you must file with the Company, before the Special Meeting, or at the Special Meeting, but before the vote, written objection to the Asset Sale. The written objection must include:

The objection is not required from any shareholder to whom the Company did not give notice of the Special Meeting.

If you intend to exercise your dissenters’ rights, you must not vote in favor of the approval of the Asset Sale. Voting against or failing to vote for the Asset Sale by itself does not constitute an election to dissent within the meaning of Section 623 of the NYBCL and will not satisfy the requirement of filing a written objection. An abstention or failure to vote will not waive your right to dissent so long as you have properly and timely filed the appropriate written objection to the Asset Sale in accordance with Section 623 and have not voted in favor of approval of the Asset Sale. A vote in favor of the Asset Sale, by proxy or online, will constitute a waiver of your election to dissent in respect of the shares voted and will nullify any previously filed written notices of election to dissent. Since a proxy left blank will be voted for approval of the Asset Sale, if you wish to exercise your dissenters’ rights you must either vote against approval of the Asset Sale or abstain. You may not dissent as to less than all of your shares as to which you have a right to dissent. A nominee or fiduciary may not dissent on behalf of any beneficial owner as to less than all of the shares of the owner, as to which the nominee or fiduciary has a right to dissent, held of record by the nominee or fiduciary. The written notice of election to dissent must be in addition to and separate from any proxy or vote abstaining from or against the Asset Sale. Finally, you must continuously be the beneficial owner of your shares through the effective date of the Asset Sale. If you fail to comply with any of these conditions and the Asset Sale is completed, you will have no dissenters’ rights with respect to your shares.

All written objections to the Asset Sale and notices of election to dissent pursuant to NYBCL Section 623(a) should be addressed to Enzo Biochem, Inc., 81 Executive Blvd. Suite 3, Farmingdale, New York 11735, Attention: Hamid Erfanian, Chief Executive Officer and should be executed by, or on behalf of, the record holder of the shares.

To be effective, a notice of election to dissent by a holder of our Common Stock must be made by or in the name of the registered shareholder, fully and correctly, as the shareholder’s name appears on his, her or its stock certificate(s) and cannot be made by the beneficial owner if he, she or it does not also hold the shares of record. The beneficial holder must, in that case, have the registered owner submit the required notice of election to dissent.

If shares are owned of record in a fiduciary capacity, such as by a trustee, guardian or custodian, execution of a notice of election to dissent should be made in that capacity; and if the shares are owned of record by more than one person, as in a joint tenancy or tenancy in common, the demand should be executed by or for all joint owners. A record owner, such as a broker, who holds shares as a nominee for others, may exercise the record owner’s dissenters’ rights with respect to the shares held for one or more beneficial owners, while not exercising this right for other beneficial owners.

If you hold your shares in a brokerage account or in other nominee form and you wish to exercise dissenters’ rights, you should consult with your broker or other nominee to determine the appropriate procedures.

Notice of Authorization by the Company

If the holders of at least a majority of the outstanding shares of our Common Stock approve the Asset Sale, then within ten days of the date of approval, we will give written notice of approval by registered mail to each shareholder who filed a timely notice of election to dissent, and who did not withdraw the notice of election to dissent prior to the vote or did not vote in favor of the Asset Sale, or from whom a dissent was not required.

Notice of Dissent by Shareholder Not Previously Required to Submit Notice of Election to Dissent

Within twenty days after the giving of notice to any shareholder from whom written objection was not required, and who elects to dissent, the dissenting shareholder must file with the Company a written notice of the election, stating the shareholder’s name and residence address, the number and classes of shares as to which the shareholder dissents and a demand for payment of the fair value of the shares.

Rights of Dissenting Shareholders Upon Consummation of the Asset Sale

Upon consummation of the Asset Sale, each shareholder will cease to have any of the rights of a shareholder except the right to be paid the fair value of the shareholder’s shares and any other rights under Section 623 of the NYBCL. A notice of election may be withdrawn by a shareholder at any time prior to the shareholder’s acceptance in writing of an offer made by the Company, as provided below, but in no case later than sixty days from the date of consummation of the Asset Sale except that if the Company fails to make a timely offer, the time for withdrawing a notice of election will be extended until sixty days from the date an offer is made. Upon expiration of that time, withdrawal of a notice of election requires the written consent of the Company. To be effective, withdrawal of a notice of election must be accompanied by the return to the Company of any advance payment made to the shareholder. If a notice of election is withdrawn, or the Asset Sale is rescinded, or a court determines that the shareholder is not entitled to receive payment for the shareholder’s shares, or the shareholder otherwise loses dissenters’ rights, the shareholders will not have the right to receive payment for the shareholder’s shares and will be reinstated to all rights as a shareholder as of the consummation of the Asset Sale, including any intervening preemptive rights and the right to payment of any intervening dividend or other distribution or, if any of these rights have expired or any dividend or distribution other than in cash has been completed, in lieu thereof, at the election of the Company, the fair value thereof in cash as determined by the Board of the Company as of the time of expiration or completion, but without prejudice otherwise to any corporate proceedings that may have been taken in the interim.

Submission of Stock Certificates for Notation

At the time of filing the notice of election to dissent or within one month after filing, the dissenting shareholder must submit the shareholder’s stock certificate(s) representing the shareholder’s dissenting shares to the Company, or to its transfer agent, which, upon receipt, will note conspicuously on the certificate(s) that a notice of election has been filed and return the certificate(s) to the shareholder who submitted them. Any shareholder with stock certificates who fails to submit them for notation will at the option of the Company, by written notice to the shareholder within forty-five days of the date of filing the notice of election to dissent, lose the shareholder’s rights, unless a court, for good cause shown, otherwise directs. Upon transfer of a certificate bearing the notation, each new certificate issued will bear a similar notation together with the name of the original dissenting holder of the shares and a transferee will acquire no rights in the Company except those rights the original dissenting shareholder had at the time of transfer.

Written Offer by the Company

Within fifteen days after the expiration of the period within which shareholders may file their notices of election to dissent, or within fifteen days after the proposed Asset Sale is consummated, whichever is later (but in no case later than ninety days from the date of the Special Meeting at which the Asset Sale was approved), the Company will make a written offer by registered mail to each shareholder who has filed a notice of election to dissent to pay for the shareholder’s shares at a specified price that the Company considers to be their fair value.

This offer will be accompanied by a statement setting forth the aggregate number of shares with respect to which notices of election to dissent have been received and the aggregate number of holders of these shares. If the Asset Sale has become effective, the offer must also be accompanied by (1) advance payment to each shareholder who submitted stock certificates to the Company for notation in an amount equal to 80% of the amount of the offer, or (2) as to a shareholder who has not yet submitted stock certificates, if the time period has not expired, or if the Company elects to grant the shareholder additional time, a statement that advance payment of 80% of the offer will be promptly made by the Company once certificates have been submitted and notated. If the Asset Sale has not become effective at the time of the offer, then the Company may wait until the Asset Sale becomes effective to send the advance payment or statement of advance payment to the dissenting shareholders and any offer extended without the payment or statement of payment may be conditioned on the effectiveness of the Asset Sale. Each advance payment or statement as to advance payment must advise the recipient shareholder that acceptance of payment does not constitute a waiver of any dissenters’ rights. If the Asset Sale has not been consummated upon the expiration of the ninety-day period after the shareholders’ authorization date, the offer may be conditioned upon the consummation of the Asset Sale. The offer made to each dissenting shareholder must be made at the same price per share to all dissenting shareholders of the same class and series of stock and will be accompanied by a balance sheet of the Company as of the latest available date, which must not be earlier than twelve months before the offer was made, and a profit and loss statement or statements for not less than a twelve-month period ended on the date of the balance sheet.

If within thirty days of the Company making the offer to the dissenting shareholders, the Company and any shareholder agree on the price to be paid for the shareholder’s dissenting shares, payment for the shares must made within sixty days after the later of the offer or the effective date of the Asset Sale, upon surrender of stock certificates for the shares.

Judicial Enforcement

If the Company fails to make an offer for the dissenting shares within the fifteen-day period described above, or if the Company makes the offer and any dissenting shareholder fails to agree with the Company upon the price to be paid for their shares within thirty days, the Company must within twenty days of the expiration of the applicable period, institute a special proceeding in the Suffolk County Supreme Court (the supreme court in the judicial district where the office of the Company is located) to determine the rights of dissenting shareholders and to fix the fair value of their shares. If the Company fails to timely institute the special proceeding within the twenty-day period, any dissenting shareholder may institute the proceeding within thirty days of the expiration of the twenty-day period. If a special proceeding is not then timely instituted, all dissenters’ rights will be lost unless the court, for good cause shown, otherwise directs.

All dissenting shareholders, excepting those who have agreed with the Company upon the price to be paid for their shares, will be made parties to the special proceeding. The Company must serve a copy of the petition in the special proceeding upon each dissenting shareholder who is a resident of New York in the manner provided by law for the service of a summons, and upon each nonresident dissenting shareholder either by registered mail and publication, or in any other manner that is permitted by law.

If a special proceeding is instituted, the court will determine whether a dissenting shareholder is entitled to receive payment for the shareholder’s shares, and the court will fix the fair value of the shares as of the close of business on the day prior to the Special Meeting at which the Asset Sale was authorized. In fixing the fair value of the shares, the court will consider the nature of the Asset Sale giving rise to the shareholder’s right to receive payment for shares and its effects on the Company and its shareholders, the concepts and methods then customary in the relevant securities and financial markets for determining fair value of shares of a corporation engaging in a similar transaction under comparable circumstances and all other relevant factors. The court will determine the fair value of the shares without a jury and without referral to an appraiser or referee. Upon application by the Company or by any shareholder who is a party to the proceeding, the court may, in its discretion, permit pretrial disclosure, including disclosure of any expert’s reports relating to the fair value of the shares whether or not intended for use at the trial in the proceeding.

A final order will be entered by the court against the Company for payment to the dissenting shareholders including interest from the date the Asset Sale was consummated to the date of payment. In determining the rate of interest, the court will consider all relevant factors, including the rate of interest which the Company would have had to pay to borrow money during the pendency of the proceeding. If the court finds that the refusal of any shareholder to accept the corporate offer of payment for the shareholder’s shares was arbitrary, vexatious or otherwise not in good faith, no interest will be allowed to that shareholder. Each party to the special proceeding will bear its own costs and expenses, including the fees and expenses of its counsel and of any experts employed by it, provided that the court may apportion or assess all or any part of the costs, expenses and fees incurred by the Company against any or all of the dissenting shareholders who are parties to the proceeding, including any who have withdrawn their notices of election, if the court finds that their refusal to accept the Company offer was arbitrary, vexatious or otherwise not in good faith. Similarly, the court may apportion and assess all or any part of the costs, fees and expenses incurred by any or all of the dissenting shareholders who are parties to the proceeding against the Company if the court finds any of the following: (1) the fair value of the shares as determined by the court materially exceeds the amount which the Company offered to pay; (2) no offer or required advance payment was made by the Company; (3) the Company failed to institute the special proceeding within the specified period; or (4) the action of the Company in complying with its obligations as provided in Section 623 of the NYBCL was arbitrary, vexatious or otherwise not in good faith. In making any determination as provided in clause the first clause, the court may consider the dollar amount or the percentage, or both, by which the fair value of the shares as determined exceeds the Company’s offer. The Company must make payment to each dissenting shareholder that is a party to the proceeding pursuant to the court order within sixty days after final determination of the special proceeding, upon surrender of the certificates for any shares represented by certificates.

Shares acquired by the Company upon the payment of the agreed value or of the amount due under the final order, may be held and disposed of as the Asset Purchase Agreement provides.

Other Considerations

No payment may be made to a dissenting shareholder at a time when the Company is insolvent or when the payment would make it insolvent. In that event, the dissenting shareholder must, at the shareholder’s option: withdraw the shareholder’s notice of election, which will then be deemed withdrawn with the written consent of the Company; or retain the shareholder’s status as a claimant against the Company and, if the Company is liquidated, be subordinated to the rights of creditors of the Company, but have rights superior to the non-dissenting shareholders, and if the Company is not liquidated, retain the shareholder’s right to be paid for the shareholder’s shares, which right the Company must satisfy when the restrictions of this paragraph do not apply. The dissenting shareholder must exercise an option by written notice given to the Company within thirty days after the Company has given the shareholder written notice that payment for the shareholder’s shares cannot be made because of the restrictions of this paragraph. If the dissenting shareholder fails to exercise an option, then the Company will exercise the option by written notice given to shareholder within twenty days after the expiration of the thirty-day period.

The enforcement by a shareholder of the shareholder’s right to receive payment for shares excludes the enforcement by that shareholder of any other right to which the shareholder might otherwise be entitled by virtue of share ownership, except as provided in paragraph (e) of Section 623 of the NYBCL, and except that Section 623 of the NYBCL does not exclude the right of a shareholder to bring or maintain an appropriate action to obtain relief on the ground that the Asset Sale is unlawful or fraudulent as to the shareholder.

Except as otherwise expressly provided in Section 623 of the NYBCL, any notice to be given by the Company to a shareholder under Section 623 of the NYBCL shall be given in the manner provided in Section 605 of the NYBCL (Notice of meetings of shareholders).

MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE ASSET SALE

The following discussion is a general summary of the material anticipated U.S. federal income tax consequences of the Asset Sale. This discussion is based upon the Internal Revenue Code of 1986, as amended (the “Code”), its legislative history, currently applicable and proposed Treasury regulations under the Code (the “Treasury Regulations”), and published rulings and decisions, all as currently in effect as of the date of this proxy statement, and all of which are subject to change, possibly with retroactive effect. Tax considerations under state, local, and non-U.S. laws, or federal laws other than those pertaining to income tax, are not addressed in this proxy statement. The following discussion has no binding effect on the IRS or the courts.

Our shareholders will not realize any gain or loss for U.S. federal income tax purposes as a result of the Asset Sale.

The proposed Asset Sale will be treated as a sale of corporate assets in exchange for cash and the assumption of certain liabilities. The adjusted tax basis in the assets being sold is less than the sales proceeds that will be received from the Buyer in which case we will incur U.S. federal and state income tax as a result of a realized gain from the Asset Sale. However, we anticipate that our tax attributes, including our U.S. federal and state net operating loss carryforwards (“NOLs”), will be available to offset a substantial portion of our U.S. federal and state income tax liabilities resulting from such gain.

In addition, in general, under Section 382 of the Code, a corporation that undergoes an “ownership change” is subject to annual limitations on its ability to use its pre-change NOLs or other tax attributes to offset future taxable income or reduce taxes. Our past issuances of stock and other changes in our stock ownership may have resulted in an ownership change within the meaning of Section 382 of the Code; accordingly, our pre-change NOLs may be subject to limitation under Section 382. However, we do not anticipate any limitation under Section 382.

The determination of our realized gain on the proposed Asset Sale and whether and to what extent our tax attributes will be available to offset the gain is highly complex and is based in part upon facts that will not be known until the completion of the Asset Sale. Therefore, it is possible that we could incur substantial U.S. federal and state income taxes as a result of the proposed Asset Sale.

PROPOSAL 1 - TO APPROVE THE ASSET SALE

This section of the proxy statement describes the material provisions of the Asset Purchase Agreement but does not purport to describe all the provisions of the Asset Purchase Agreement. The following summary is qualified in its entirety by reference to the complete text of the Asset Purchase Agreement, which is included as Annex A to this proxy statement and is incorporated into this proxy statement by reference. We urge you to read the full text of the Asset Purchase Agreement because it is the legal document that governs the Asset Sale. The Asset Purchase Agreement has been included to provide you with information regarding its terms. It is not intended to provide you with any other factual information about us. Such information can be found elsewhere in this proxy statement and in the other public filings we make with the SEC, which are available without charge at www.sec.gov.

Structure of the Asset Sale

We have agreed to sell substantially all the operating assets, and assign certain liabilities, of our clinical laboratory business (the “Business”) to the Buyer for an aggregate Purchase Price of $146 million payable in cash at closing, subject to adjustment and subject to the conditions described below, under “Conditions to Closing of the Asset Sale.”

Principal Provisions of the Asset Purchase Agreement

Assets to be Sold

The assets to be purchased by the Buyer constitute substantially all the assets of the Business, including customer accounts, sales data, records, and promotional materials, customer and vendor lists, inventory and supplies, tangible personal property and equipment, reserves, security deposits, prepaid expenses, and credits related to assigned contracts.

The acquired assets also include intellectual property assets used exclusively in the Business, such as trade names and domain names, but the acquired assets do not include any patents or any intellectual property related to products manufactured or procured by the Company or its subsidiaries on behalf of the Business before the closing.  In connection with the transfer of such intellectual property, the Company will agree not to sue Labcorp or its affiliates for infringement of certain intellectual property owned by the Company or its affiliates that may be used by Labcorp in its operation of the Business after closing.  The covenant not to sue does not apply to activities of Labcorp outside of its operation of the Business or the infringement of intellectual property rights held by the Company or its affiliates with regard to products that the Company traditionally procured for the Business, including reagents, probes, antibodies, dyes and the GENFLEX equipment.

Liabilities to be Assumed

The Buyer will assume only those liabilities arising after the closing under leases and other contracts that constitute acquired assets as identified in the schedules to the Asset Purchase Agreement. All other liabilities will remain our obligations.

Consideration to Be Received in the Asset Sale and Purchase Price Adjustments

We will receive approximately $146 million in exchange for substantially all of the assets of the Business. We will retain our existing cash, cash equivalents and accounts receivable, among other assets, upon consummation of the Asset Sale. The total Purchase Price to be paid upon closing is $146 million, subject to the following adjustments:

Further, upon obtaining shareholder approval, Buyer shall pay us a daily fee of $75,000, payable monthly, until closing, which amount will be wholly or partly credited against the Purchase Price to be paid upon closing. Generally the entire fee is credited against the purchase price unless HSR Approval has been obtained, all other conditions to closing in the Company’s control are met, and Buyer elects not to close earlier than 120 days after signing, in which case one-half of the fee payable after HSR Approval can be retained by the Company. In the event that the Asset Purchase Agreement is terminated, the Company would be obligated to return all amounts previously paid to the Company with respect to such daily fee, except in very limited circumstances.

Terms of Indemnification and Escrow

The Asset Purchase Agreement provides that at the closing, Buyer shall deposit the Escrow Amount into an escrow account for the purpose of satisfying indemnification claims, if any, made by Buyer against Seller. The Escrow Amount will be held in the escrow account for a period of fifteen months after the closing of the Asset Sale.

The representations and warranties of the Company and the right of the Buyer to indemnification under the Asset Purchase Agreement generally survive the closing date of the Asset Sale for 15 months. The Company will deposit the Escrow Amount into an escrow account at the closing of the Asset Sale to secure its indemnification obligations to the Buyer with respect to breaches of the Company’s representations and warranties, breaches of covenants, losses related to excluded assets or excluded liabilities and certain other matters set forth in the Asset Purchase Agreement.

Other than in the case of fraud or breach of the Fundamental Representations or breach of representations and warranties related to certain tax matters, the Seller shall not be liable to the Buyer for indemnification unless and until the aggregate amount of the indemnification obligations exceeds the Deductible, in which event the Seller shall then be liable for losses in excess of the Deductible up to an amount equal to $584,000 (payable from the Escrow Amount), and the remainder of the losses shall be satisfied from Buyer’s R&W Policy. With respect to claims by Buyer regarding certain other tax matters and breaches of Fundamental Representations, subject to certain limitations, Buyer is entitled to satisfy losses first from the Escrow Amount (up to an amount equal to the Deductible), second from its R&W Policy, and last from the Escrow Amount or, if exhausted, from Seller directly up to the amount of the Purchase Price. With respect to any claim by Buyer regarding (i) excluded liabilities, excluded assets or the excluded business specified in the Asset Purchase Agreement, or (ii) breach, default of, or failure by Seller or the Company to perform the covenants or obligations of the Asset Purchase Agreement, Buyer is entitled to satisfy losses first from Escrow Amount and then from Seller directly.

Conditions to the Closing of the Asset Sale

The parties’ obligation to complete the Asset Sale is subject to certain customary conditions, including, but not limited to:

The Buyer’s obligation to complete the Asset Sale is subject to certain conditions, including, but not limited to:

The assertions embodied in the representations and warranties are qualified by information in a confidential disclosure letter that we provided to the Buyer in connection with signing the Asset Purchase Agreement and are not intended to provide any other factual information about us. The disclosure letter contains information that modifies, qualifies and creates exceptions to the representations and warranties. However, if we become aware of specific material facts that contradict the representations and warranties included in the Asset Purchase Agreement, we will provide updated disclosure as necessary to make disclosures in this proxy statement not misleading.

Covenants Relating to the Conduct of Our Business

Pursuant to the Asset Purchase Agreement, the Company and the Buyer are subject to certain Pre-Closing Covenants regarding the conduct of our business prior to closing. These covenants include: