Item 1.01 Entry into a Material Definitive Agreement.
Agreement and Plan of Merger and Reorganization
On November 11, 2020, Akers Biosciences, Inc. ("Akers" or the "Company"), XYZ
Merger Sub Inc., a Florida corporation and a wholly-owned subsidiary of Akers
("Merger Sub"), and MYMD Pharmaceuticals, Inc., a privately-held Florida
corporation ("MYMD"), entered into an Agreement and Plan of Merger and
Reorganization (the "Merger Agreement"), pursuant to which, among other things,
subject to the satisfaction or waiver of the conditions set forth in the Merger
Agreement, Merger Sub will merge with and into MYMD, with MYMD being the
surviving corporation and becoming a wholly-owned subsidiary of the Company (the
"Merger"). The Merger is intended to qualify for federal income tax purposes as
a tax-free reorganization under the provisions of Section 368(a) of the Internal
Revenue Code of 1986, as amended. In addition, in connection with the execution
of the Merger Agreement, Akers agreed to advance a bridge loan of up to
$3,000,000 to MYMD pursuant to a Secured Promissory Note.
Subject to the terms and conditions of the Merger Agreement, at the effective
time of the Merger (the "Effective Time"), (i) each outstanding share of common
stock of MYMD ("MYMD common stock"), will be converted into the right to receive
the number of shares of the common stock of Akers (the "Akers common stock")
equal to the exchange ratio described below; and (ii) each outstanding stock
option of MYMD (collectively, "MYMD options") that has not previously been
exercised prior to the Effective Time, whether or not vested, will be assumed by
the Company subject to certain terms contained in the Merger Agreement
(including, but not limited to, the amendment of such stock option to extend the
term of such stock option for a period expiring on the second-year anniversary
of the Effective Time). In connection with the Merger, each holder of options is
required to enter into a Lock-Up Agreement/Leak-Out Agreement with respect to
the shares of Akers common stock issued upon the exercise of such option. Also,
not later than 30 days after the second-year anniversary of the Effective Date,
the Company will pay stockholders of MYMD on a pro rata basis an amount in cash
equal to the aggregate cash proceeds received by Akers from the exercise of any
MYMD options assumed by the Company prior to the second-year anniversary of the
Effective Time; provided, however, the amount of such payment will not exceed
the maximum amount of cash consideration that may be received by stockholders of
MYMD without affecting the intended tax consequences of the Merger.
Additionally, under the terms of the Merger Agreement, the Company has agreed to
pay contingent consideration to MYMD stockholders in the form of milestone
payments payable in shares of Akers common stock (collectively, the "Milestone
Payments"). The Milestone Payments are payable in the dollar amounts set forth
in the chart below upon the achievement of the milestone events set forth
opposite such dollar amount during the 36-month period immediately following the
Effective Date (the "Milestone Period") as follows:
Milestone Event Milestone Payment
Market capitalization of Akers for at $20 million.
least 10 trading days during any 20
consecutive trading day period during
the Milestone Period is equal to or
greater than $500 million (the "First
For every $250 million incremental $10 million per each incremental
increase in market capitalization of increase (it being understood, however,
Akers after the First Milestone Event that, if such incremental increase
to the extent such incremental increase results in market capitalization equal
occurs for at least 10 trading days to $1 billion , such $20 million
during any 20 consecutive trading day payment in respect of such incremental
period during the Milestone Period, up increase shall be payable without
to a $1 billion market capitalization duplication of any amount payable in
respect of a Second Milestone Event).
Market Capitalization of Akers for at $25 million.
least 10 trading days during any 20
consecutive trading day period is equal
to or greater than $1 billion (the
"Second Milestone Event").
For every $1 billion incremental $25 million per each incremental
increase in market capitalization of increase.
Akers after the Second Milestone Event
to the extent such incremental increase
occurs for at least 10 trading days
during any 20 consecutive trading day
period during the Milestone Period.
Each milestone payment will be payable in shares of common stock of Akers (the
"Milestone Shares"), with the number of Milestone Shares to be issued determined
by dividing the applicable Milestone Payment amount by the volume-weighted
average price of a share of Akers' common stock during the 10 trading days
immediately preceding the achievement of the milestone event; provided, however,
that in no event shall the price of a share of Akers common stock used to
determine the number of Milestone Shares to be issued be deemed to be less than
$5.00 per share (as adjusted for stock splits, stock dividends, reverse stock
splits, and the like occurring after the Closing Date).
Notwithstanding the above, the number of Milestone Shares payable by Akers shall
not exceed the number of shares of Akers common stock to be issued to MyMD
stockholders at the Effective Time in connection with the Merger (as described
in the following paragraph).
Under the exchange ratio formula in the Merger Agreement, upon the closing of
the Merger, the former MYMD securityholders are expected to own approximately
80% of the aggregate number of shares of Akers common stock issued and
outstanding immediately following the consummation of the Merger (the
"Post-Closing Shares"), and the stockholders of the Company as of immediately
prior to the Merger are expected to own approximately 20% of the aggregate
number of Post-Closing Shares.
Immediately prior to the Effective Time, the name of the Company will be changed
from "Akers Biosciences, Inc." to "MyMD Pharmaceuticals, Inc." At the Effective
Time, the Merger Agreement contemplates that the board of directors of the
Company will consist of seven directors, with (i) Akers having the right to
designate up to four members and (ii) MYMD having the right to designate up to
three members. The officers of the Company immediately after the Effective Time
will be elected by the board of directors of Akers.
The Merger Agreement contains customary representations, warranties and
covenants made by the Company and MYMD, including covenants relating to
obtaining the requisite approvals of the stockholders of the Company and MYMD,
indemnification of directors and officers, and the Company's and MYMD's conduct
of their respective businesses between the date of signing the Merger Agreement
and the closing of the Merger. Consummation of the Merger is subject to certain
closing conditions, including, among other things, approval by the stockholders
of Akers and MYMD.
The Merger Agreement contains certain termination rights for both the Company
. . .
Item 3.02 Unregistered Sales of Equity Securities.
The information contained in Item 1.01 of this Current Report on Form 8-K
related to the Shares, the Warrants, the Placement Agent Warrants, and the
shares of Akers common stock issuable upon the exercise of Warrants and
Placement Agent Warrants is incorporated herein by reference.
Item 8.01 Other Events.
On November 11, 2020, the Company issued a joint press release with MYMD
relating to the Merger Agreement. A copy of the joint press release is attached
hereto as Exhibit 99.1 and is incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
2.1*+ Agreement and Plan of Merger and Reorganization, dated November 11,
2020, by and among Akers Biosciences, Inc., XYZ Merger Sub Inc., and
MYMD Pharmaceuticals, Inc.
2.2+ Form of Voting Agreement, by and between Akers Biosciences, Inc. and
the directors, officers and certain specified stockholders of MyMD
2.3+ Form of Voting Agreement, by and between MYMD Pharmaceuticals, Inc.
and the directors, officers and certain stockholders of Akers
4.1+ Form of Pre-Funded Warrant. of Akers Biosciences, Inc.
4.2+ Form of Investor Warrant. of Akers Biosciences, Inc.
10.1+ Form of Lock-Up/Leak-Out Agreement
10.2+ The Secured Promissory Note, dated November 11, 2020, by and between
Akers Biosciences, Inc. and MYMD Pharmaceuticals, Inc.
10.3+ Form of Securities Purchase Agreement, dated November 11, 2020, by and
between Akers Biosciences, Inc. and purchasers named therein
10.4+ Form of Lock-Up and Support Agreement, dated November 11, 2020, by and
between Akers Biosciences, Inc. and its stockholders named therein
99.1+ Press Release, dated November 11, 2020
*The schedules and exhibits to the Agreement and Plan of Merger and
Reorganization have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A
copy of any omitted schedule and/or exhibit will be furnished to the SEC upon
+ Previously filed.
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