Alliqua BioMedical, Inc. (NASDAQ:ALQA) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 Entry into a Material Definitive Agreement.
On November 27, 2018, AquaMed Technologies, Inc. (“AquaMed”), a wholly-owned subsidiary of Alliqua BioMedical, Inc. (“Alliqua” or the “Company”), AQ TOP, LLC, a Delaware limited liability company and a wholly-owned subsidiary of AquaMed (“Merger Sub”), and TO Pharmaceuticals, LLC, a Delaware limited liability company (“TOP”), entered into an Agreement and Plan of Merger (the “Merger Agreement”), 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 TOP, with TOP becoming a wholly-owned subsidiary of the AquaMed and the surviving company of the merger (the “Merger”). The Merger is intended to qualify for federal income tax purposes as a tax-free contribution under the provisions of Section 351(a) of the Internal Revenue Code of 1986, as amended.
The following description of the Merger Agreement, and the transactions contemplated thereby, are included to provide you with information regarding their terms. They do not purport to be a complete description and are qualified in their entirety by reference to the full text of such agreement, which it attached hereto as Exhibit 2.1 and incorporated herein by reference.
The Merger will occur after the consummation by Alliqua of the following steps:
(1) to an Asset Contribution and Separation Agreement to be entered into by and between Alliqua and AquaMed (the “Separation Agreement”) prior to consummation of the Merger, Alliqua will transfer certain assets and liabilities utilized primarily in connection with its custom hydrogels contract manufacturing business to AquaMed (the “Separation”),
(2) AquaMed will issue a to be determined number of shares of common stock to Alliqua in consideration of the contribution of assets to the Separation Agreement (the “Distribution Consideration”),
(3) Alliqua will distribute to its stockholders all of the issued and outstanding shares of common stock, par value $0.001 per share, of AquaMed by way of a pro rata dividend (the “Distribution”), and
(4) Alliqua will consummate the previously announced reverse merger transaction with Adynxx, Inc. (“Adynxx”), to that certain Agreement and Plan of Merger and Reorganization, dated as of October 11, 2018, by and among Alliqua, Embark Merger Sub, Inc. and Adynxx.
At the effective time of the Merger, all of the outstanding membership units of TOP will be converted into the right to receive, in the aggregate, merger consideration consisting of shares of AquaMed common stock. Immediately after the effective time of the Merger and consummation of the Private Placement (as defined below), before giving effect to any fees payable in equity to financial advisors or other intermediaries, the current members of TOP and the third-party investors that participate in the Private Placement are expected to hold approximately 90% of the total number of shares of AquaMed common stock outstanding (on a fully diluted basis).
The consummation of the Merger is subject to certain customary and other conditions, including (i)the completion of the Separation and the Distribution, (ii)the effectiveness of the registration statement on Form 10 to be filed with the SEC with respect to, and the approval for listing on the NASDAQ Capital Market of, the shares of AquaMed common stock to be issued in the Distribution and the Merger, (iii) receipt of binding commitments from third-party investors to consummate a private placement of AquaMed’s common stock in a minimum aggregate amount of $10 million immediately prior to the effective time of the Merger (the “Private Placement”) (iv)the accuracy of the parties’ representations and warranties and the performance of their respective covenants contained in the Merger Agreement, and (v)receipt of an independent third-party valuation of the AquaMed common stock to be issued in the Distribution.
The Merger Agreement contains customary and other representations, warranties and covenants, including a covenant for AquaMed to use (i) commercially reasonable efforts to consummate and make effective the Separation and payment of the Distribution Consideration contemplated by the Distribution Agreement in accordance with its terms and (ii) reasonable best efforts to consummate the Private Placement.
The Merger Agreement contains certain termination rights for AquaMed and TOP, including a termination right of either AquaMed or TOP if the Merger is not consummated by February 15, 2019.
The agreements that will govern the terms of the Separation will be entered into prior to the completion of the Separation and Merger, including the Separation Agreement and a Tax Matters Agreement. Neither the Separation, Distribution nor the Merger will require the approval of the stockholders of Alliqua.
Item 8.01 Other Events.
On November 28, 2018, Alliqua issued a joint press release with TOP. 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.
*The schedules and exhibits to the merger agreement have been omitted to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the Securities and Exchange Commission upon request.
Alliqua BioMedical, Inc. ExhibitEX-2.1 2 tv508028_ex2-1.htm EXHIBIT 2.1 Exhibit 2.1 Execution Version AGREEMENT AND PLAN OF MERGER by and among AQUAMED TECHNOLOGIES,…To view the full exhibit click here
About Alliqua BioMedical, Inc. (NASDAQ:ALQA)
Alliqua BioMedical, Inc. is a provider of advanced wound care solutions. The Company’s businesses include advanced wound care and contract manufacturing. The Company operates through its subsidiaries, such as AquaMed Technologies, Inc. and Choice Therapeutics, Inc. The Company is engaged in developing a suite of advanced wound care solutions that will enable surgeons, clinicians and wound care practitioners to address the challenges in chronic and acute wounds. The Company utilizes hydrogel technology through which hydrogels are manufactured by introducing a hydrophilic polymer into water to create a feed mix. The Company’s commercial wound care portfolio consists of over four product categories, such as Human Biologics; Antimicrobial Protection; Exudate Management and Contract Manufacturing. Human Biologics include BIOVANCE and Extracellular Matrix (ECM). Under Antimicrobial Protection, the Company offers TheraBond 3D Antimicrobial Barrier Systems and SilverSeal.