Item 1.01 Entry into a Material Definitive Agreement.
Amendment No. 3 to Merger Agreement with invoX Pharma
On December 20, 2022, F-star Therapeutics, Inc., a Delaware corporation (the
"Company"), invoX Pharma Limited, a private limited company organized under the
laws of England and Wales ("Parent") and Fennec Acquisition Incorporated, a
Delaware corporation and a wholly owned subsidiary of Parent ("Purchaser" and
together with the Company and Parent, the "Parties"), entered into Amendment
No. 3 ("Amendment No. 3") to the Agreement and Plan of Merger, dated as of
June 22, 2022, by and among the Parties and Sino Biopharmaceutical Limited, a
company organized under the laws of the Cayman Islands, as "Guarantor" (the
"Merger Agreement").
Pursuant to Amendment No. 3, the Parties have agreed to reduce one of Parent's
conditions to its obligation to complete the Offer as set forth in Annex I of
the Merger Agreement. Specifically, with respect to Clause (f) thereof, which is
related to the Foreign Investment Condition, Parent has agreed that such
condition shall be deemed satisfied with respect to the Parties' joint voluntary
notification filing with the Committee on Foreign Investment in the United
States ("CFIUS") as long as "the Parties have not received notification of any
actual or threatened commencement of any Legal Proceeding, issuance of any
order, or taking of any other action, by or on behalf of CFIUS that would seek
to enjoin, prevent, restrain or otherwise prohibit the consummation of the
Transactions". Previously, the Merger Agreement had required that Clause
(f) could be satisfied only if CFIUS affirmatively cleared the Transactions
(i.e., a proactive "CFIUS Action", as defined in the Merger Agreement). As
amended, this Offer condition now would require Parent to complete the Offer if
the Parties have not received any notice that CFIUS objects to the closing of
the Transaction as set forth above by the Expiration Date, and all of the Offer
conditions are satisfied or waived, as may be applicable, at such time.
For background, this Transaction is not subject to any mandatory filing
requirement with CFIUS. Rather, in the Merger Agreement, the Parties
contractually agreed to submit a joint voluntary notification filing ("Joint
Voluntary Notice") to CFIUS and to include as a condition of the Parent's
requirement to complete the Offer that the affirmative clearance of a "CFIUS
Action", as defined in the Merger Agreement, must be obtained. The CFIUS review
period for this Joint Voluntary Notice has been ongoing since August 2, 2022 -
approximately 135 days. On October 31, 2022, the Parties, after conferring with
CFIUS, voluntarily withdrew and refiled their Joint Voluntary Notice in order to
afford CFIUS another statutory review period. At such time, the Parties informed
CFIUS of the urgent need to close the Transaction given the significant
challenges facing the Company, including that the Company would need to lay off
a significant number of its employees and terminate several of its clinical
studies, which would result in patients no longer receiving potentially
life-saving treatments. CFIUS has informed the parties that it is continuing to
consider whether mitigation measures could be fashioned to adequately resolve
certain unresolved national security risks potentially associated with the
Transaction. The Parties continue to cooperate with CFIUS to help facilitate its
review and have responded to all information requests made by CFIUS.
Given that the CFIUS investigation is still ongoing (as described above) and the
challenging financial circumstances of the Company to continue independently as
a going concern, earlier this week the Parties provided advance notice to CFIUS
of their intention:
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• to enter into Amendment No. 3 to reduce Purchaser's contractual Offer
condition from a standard of affirmative CFIUS clearance to a standard of
the absence of any notice that CFIUS objects to the closing of the
Transaction, as defined in the Amendment No. 3, and
• to allow the Parties to complete the Offer no earlier than five
(5) business thereafter, subject to CFIUS not notifying the parties that
it objects to closing (and subject to the satisfaction or waiver, as may
be applicable, of all the Offer conditions).
Further, in doing so, the Parties expressed to CFIUS their dual goals of
(1) closing the Transaction in order to keep U.S. patients in the potentially
life-saving cancer clinical trials sponsored by the Company and avoid extensive
employee layoffs, especially given the financing challenges of the Company as a
stand-alone entity, and (2) continuing to proactively engage with CFIUS to
address any unresolved national security risks. The Parties also informed CFIUS
that they did not want to take this course of action if CFIUS would find it
objectionable. In this regard, the Parties informed CFIUS that applicable
securities laws would require that the Offer be extended for five (5) business
days following Amendment No. 3, and that such period would give CFIUS additional
time to inform the Parties if it objected to the Transaction.
Further, the Parties also made a joint voluntary notification filing regarding
the Transaction in the United Kingdom, where the Company and its research
facilities are based. On September 29, 2022, the regulatory agency in charge of
enforcing the UK's National Security and Investment Act ("NSIA"), which has a
similar function to CFIUS in the United States, informed the Parties that its
investigation was complete and that Parties were clear to proceed with the
Transaction.
Amendment No. 3 reduces Purchaser's contractual Offer condition related to the
Foreign Investment Condition and, in effect, shifts the risk of any post-closing
regulatory concerns to the Parent/Purchaser. As such, Amendment No. 3 makes the
completion of the Transaction more likely as a contractual matter, as long as no
notification is received by the Parties. The Board of Directors believes that
the completion of the Transaction is in the best interests of the Company's
stockholders. The Transaction has significant support from the Company's
stockholders. As of December 16, 2022, approximately 70% of the Company's
stockholders had tendered their shares in the Offer (even though the Foreign
Investment Condition, as in effect then, had not be satisfied).
There can be no assurances that the Transaction will be completed. For example,
CFIUS may notify the parties prior to Closing that it objects to the closing,
and Parent would have no obligation to complete the Offer, unless it waived such
condition, to the extent waivable under the Merger Agreement and applicable law.
Further, any actual or threatened action by or on behalf of CFIUS Notice of
Objection could cause the Parties to delay the anticipated completion of the
Transaction.
Other than as expressly modified pursuant to Amendment No. 3, the Merger
Agreement, which was previously filed as Exhibit 2.1 to the Current Report on
Form 8-K filed with the Securities and Exchange Commission by the Company on
June 23, 2022, remains in full force and effect as originally executed on
June 22, 2022, as amended. The foregoing description of Amendment No. 3 does not
purport to be complete and is subject to, and qualified in its entirety by, the
full text of Amendment No. 3 attached hereto as Exhibit 2.1 to this Current
Report on Form 8-K, which is incorporated herein by reference.
Item 8.01 Other Events
Extension of Tender Offer Until December 28, 2022
On December 20, 2022, Purchaser, Parent and Guarantor extended the Offer to one
minute past 11:59 p.m., Eastern Time, on December 28, 2022, unless further
extended. The Offer was previously set to expire at 5:00 p.m., Eastern Time, on
December 23, 2022.
Forward-Looking Statements
This report contains forward-looking statements. Forward-looking statements are
generally identified by the words "expects", "anticipates", "believes",
"intends", "estimates", "plans", "will be" and similar expressions. These
forward-looking statements include, without limitation, statements related to
the anticipated timing of CFIUS review
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of the contemplated transaction, anticipated consummation of the acquisition of
the Company and the timing and benefits thereof, and other statements that are
not historical facts. These forward-looking statements are based on Parent's and
the Company's current expectations and inherently involve significant risks and
uncertainties. Actual results and the timing of events could differ materially
from those anticipated in such forward-looking statements as a result of these
risks and uncertainties, which include, without limitation, risks related to the
parties' ability to complete the transaction on the proposed terms and schedule;
whether the tender offer conditions will be satisfied; whether sufficient
stockholders of the Company tender their shares in the transaction; the outcome
of legal proceedings that may be instituted against the Company and/or others
relating to the transaction; the failure (or delay) to receive the required
regulatory approvals, including CFIUS, relating to the transaction; the
possibility that CFIUS might object to the closing of the Transaction; the
possibility that competing offers will be made; and other risks related to the
Company's business detailed from time-to-time under the caption "Risk Factors"
and elsewhere in the Company's SEC filings and reports, including the Company's
Annual Report on Form 10-K for the year ended December 31, 2021 and the
Company's Quarterly Reports on Form 10-Q for the quarters ended June 30, 2022
and September 30, 2022. The Company undertakes no duty or obligation to update
any forward-looking statements contained in this report as a result of new
information, future events or changes in their expectations, except as required
by law.
Additional Information and Where to Find It
A tender offer statement on Schedule TO, including an offer to purchase, a
letter of transmittal and related documents, was filed with the SEC by invoX and
Purchaser, and a Solicitation / Recommendation Statement
on Schedule 14D-9 was filed with the SEC by the Company. The offer to purchase
shares of Company common stock is being made pursuant to the offer to purchase,
the letter of transmittal and related documents filed as a part of the Schedule
TO. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ BOTH THE TENDER OFFER
STATEMENT AND THE SOLICITATION / RECOMMENDATION STATEMENT REGARDING THE OFFER,
AS THEY MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME BECAUSE THEY CONTAIN
IMPORTANT INFORMATION THAT INVESTORS AND SECURITY HOLDERS SHOULD CONSIDER BEFORE
MAKING ANY DECISION REGARDING TENDERING THEIR COMMON STOCK, INCLUDING THE TERMS
AND CONDITIONS OF THE TENDER OFFER. Investors and security holders may obtain a
free copy of these statements and other documents filed with the SEC at the
website maintained by the SEC at www.sec.gov or by directing such requests to
the Information Agent for the Offer, which is named in the tender offer
statement. Investors may also obtain, at no charge, the documents filed or
furnished to the SEC by the Company under the "Investors" section of the
Company's website at www.f-star.com.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No. Description
2.1 Amendment No. 3 to Agreement and Plan of Merger, dated December 20,
2022.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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