First Wave BioPharma, Inc. (NasdaqCM:FWBI) signed a non-binding term sheet to acquire ImmunogenX, LLC for approximator $3 million on December 18, 2023. First Wave BioPharma will acquire ImmunogenX in an all-stock transaction. Pursuant to the LOI, the Company would acquire 100% of the outstanding equity of IMGX on a fully diluted basis and, after stockholder approval of the proposed transaction, the shareholders of IMGX will own a majority of the equity interests of the combined company. Under the terms of the Merger Agreement, upon the consummation of the Merger on March 13, 2024 (the ?Closing?), in exchange for the outstanding shares of capital stock of ImmunogenX immediately prior to the effective time of the First Merger, the Company issued to the stockholders of ImmunogenX an aggregate of (A) 36,830 shares of common stock of the Company, par value $0.0001 per share (the ?Common Stock?), and (B) 11,777.418 shares of Series G Preferred Stock (as defined and described below), each share of which is convertible into 1,000 shares of Common Stock, subject to certain conditions described below. In addition, the Company assumed (i) all ImmunogenX stock options immediately outstanding prior to the First Merger, each becoming an option to purchase Common Stock subject to adjustment pursuant to the terms of the Merger Agreement (the ?Assumed Options?) and (ii) all ImmunogenX warrants immediately outstanding prior to the First Merger, each becoming a warrant to purchase Common Stock subject to adjustment pursuant to the terms of the Merger Agreement (the ?Assumed Warrants?). The Assumed Options are exercisable for an aggregate of 200,652 shares of Common Stock, have an exercise price of $0.81 and expire between February 1, 2031 and June 6, 2033. The Assumed Warrants are exercisable for and aggregate of 127,682 shares of Common Stock, have exercise prices ranging from $3.02 to $3.92 and expire between September 30, 2032 and September 6, 2033. Upon closing of the acquisition, the Company issued 365,162 shares of its common stock to the shareholders (including option and warrant holders) of ImmunogenX equal to 19.02% of its currently issued and outstanding common stock and 11,777.418 shares of its newly issued Series G Convertible Preferred Stock (with a conversion ratio of Preferred to Common at 1:1000) representing on a fully diluted basis 81.9% for ImmunogenX and 18.1% for First Wave Biopharma (excluding transaction fees) with a combined fully diluted equity value of $104 million. The shares of the Company?s common stock issuable upon conversion of the Series G Preferred Stock shall be subject to stockholder approval in compliance with the rules of the Nasdaq Stock Market.

Following the close of the proposed Acquisition, James Sapirstein is expected to continue serving as Chairman and Chief Executive Officer with Jack Syage, Ph.D., Chief Executive Officer and Co-Founder of IMGX, assuming the role of President and Chief Operating Officer. The transaction, which has been approved by the Boards of Directors of both companies, is subject to the negotiation and execution of definitive documentation, approval of the stockholders of both First Wave BioPharma and ImmunogenX and other customary closing conditions and is expected to close in the first half of 2024. Tungsten Advisors acted as exclusive financial advisor to First Wave BioPharma. Tungsten Partners LLC (?Tungsten?) acted as financial advisor to the Company in connection with the Merger. As partial compensation for services rendered by Tungsten, the Company issued to Tungsten or its affiliates or designees an aggregate of 18,475 shares of Common Stock and 595.808 shares of Series G Preferred Stock. Michael Lerner of Lowenstein Sandler LLP acted as legal advisor to First Wave BioPharma, Inc. David Schulman of Orrick, Herrington & Sutcliffe LLP acted as legal advisor to ImmunogenX, LLC.