DIPEXIUM PHARMACEUTICALS,INC. (NASDAQ:DPRX) Files An 8-K Entry into a Material Definitive Agreement

DIPEXIUM PHARMACEUTICALS,INC. (NASDAQ:DPRX) Files An 8-K Entry into a Material Definitive Agreement

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Item 1.01 Entry into a Material Definitive
Agreement

On December22, 2016, Dipexium Pharmaceuticals,Inc.
(DPRX or the
Company),
Dipexium Acquisition Corp., a Delaware corporation and a
wholly-owned subsidiary of DPRX (AcquireCo) and
PLx Pharma Inc., a Delaware corporation (PLx), entered
into an Agreement and Plan of Merger and Reorganization (the
Merger
Agreement
), to which, among other things, subject
to the satisfaction or waiver of the conditions set forth in the
Merger Agreement, AcquireCo will merge with and into PLx, with
PLx becoming a wholly-owned subsidiary of DPRX and the surviving
corporation of the merger (the Merger). The
Merger is intended to qualify for federal income tax purposes as
a tax-free reorganization under the provisions of Section368(a)of
the Internal Revenue Code of 1986, as amended.

Subject to the terms and conditions of the Merger Agreement, the
percentage of the combined company that DPRX stockholders will
own following the closing of the Merger is subject to adjustment
based on the level of DPRXs cash at the closing. On a pro forma
basis, based upon the number of shares of DPRX common stock
(DPRX Common
Stock
) to be issued in the Merger, following the
closing of the Merger, (i)current DPRX stockholders will own
approximately 23.25% of the combined company and current PLx
stockholders will own approximately 76.75% of the combined
company if DPRXs cash at closing is equal to or in excess of
$12.5 million, (ii)current DPRX stockholders will own
approximately 22.5% of the combined company and current PLx
stockholders will own approximately 77.5% of the combined company
if DPRXs cash at closing is equal to or in excess of $12 million.

Consummation of the Merger is subject to certain closing
conditions, including, among other things, approval by the
stockholders of DPRX and PLx. The Merger Agreement contains
certain termination rights for both DPRX and PLx, and further
provides that, upon termination of the Merger Agreement under
specified circumstances, DPRX may be required to pay PLx a
termination fee of $700,000 or PLx may be required to pay DPRX a
termination fee of $500,000.

The Merger Agreement also contains customary representations,
warranties and covenants made by DPRX and PLx, including as to
the indemnification of directors and officers, and DPRXs and PLxs
conduct of their respective businesses between the date of
signing the Merger Agreement and the closing of the Merger.

In connection with the Merger, DPRX will seek to amend its
certificate of incorporation to: (i)increase the number of
authorized shares of DPRX Common Stock, (ii)change the name of
DPRX to PLx Pharma Inc., subject to the consummation of the
Merger and (iii) if deemed reasonably necessary by PLx, effect a
reverse stock split.

to the terms of the Merger Agreement, DPRX will make a bridge
loan available to PLx in the principal amount of $2 million by
January15, 2017.

Also in connection with the Merger Agreement, (i)certain
directors and officers of DPRX holding approximately 35% of the
outstanding capital stock of DPRX have each entered into a voting
agreement in favor of PLx and prior to the filing of the
registration statement on Form S-4, certain directors and
officers of DPRX owning or controlling approximately 38% of the
outstanding capital stock of DPRX will enter into a lock-up
agreement in favor of DPRX and PLx, and (ii)the officers,
directors and certain stockholders of PLx owning or controlling
approximately 35% of PLxs voting securities have each entered
into a voting agreement in favor of DPRX and prior to the filing
of the registration statement on Form S-4, officers, directors
and certain stockholders of PLx owning or controlling
approximately 50% of PLxs voting securities will enter into a
lock-up agreement in favor of DPRX and PLx (collectively, the
Support
Agreements
). The Support Agreements place certain
restrictions on the transfer of the shares of DPRX and PLx held
by the respective signatories thereto and covenants on the voting
of such shares in favor of approving the transactions
contemplated by the Merger Agreement and against any actions that
could adversely affect the consummation of the Merger.

DPRXs and PLxs obligations to consummate the Merger are subject
to the satisfaction or waiver of customary closing conditions,
including, among others, obtaining the requisite approvals of the
stockholders of DPRX and PLx, including the approval of the
charter amendments by the stockholders of DPRX, DPRX having a
minimum level of cash of $12 million at the time of closing, and
the effectiveness of a registration statement on FormS-4 relating
to the shares of DPRX common stock to be issued to PLx
stockholders to the Merger Agreement.

The Board of Directors of DPRX has unanimously approved the
Merger Agreement and the related transactions, and has adopted
resolutions recommending the requisite stockholder approval for
the issuance of the shares of DPRX common stock to the Merger.
DPRX has agreed to hold a stockholders meeting to submit
certain matters to its stockholders for their consideration. In
connection with the Merger, DPRX intends to file with the SEC a
registration statement on FormS-4, which will include a proxy
statement/prospectus of both DPRX and PLx and other relevant
materials in connection with the proposed transactions.

The foregoing description of (i)the Merger Agreement and the
transactions contemplated thereby and (ii)the Support
Agreements and the transactions contemplated thereby, in each
case, do not purport to be complete and are qualified in their
entirety by reference to the Merger Agreement, which is filed
as Exhibit2.1 hereto and which is incorporated herein by
reference, and to the form of DPRX Voting Agreement, the form
of PLx Voting Agreement, the form of DPRX Lock-Up Agreement and
the form of PLx Lock-Up Agreement, which are filed as Exhibits
10.1, 10.2, 10.3 and 10.4, respectively, hereto and which are
incorporated herein by reference. The Merger Agreement has been
filed to provide information to investors regarding its terms.
It is not intended to provide any other factual information
about DPRX, PLx or AcquireCo, their respective businesses, or
the actual conduct of their respective businesses during the
period prior to the consummation of the Merger or the other
transactions contemplated by the Merger Agreement. The Merger
Agreement and this summary should not be relied upon as
disclosure about DPRX, PLx or AcquireCo. None of DPRXs
stockholders or any other third parties should rely on the
representations, warranties and covenants or any descriptions
thereof as characterizations of the actual state of facts or
conditions of DPRX, PLx, AcquireCo or any of their respective
subsidiaries or affiliates. The Merger Agreement contains
representations and warranties that are the product of
negotiations among the parties thereto and that the parties
made to, and solely for the benefit of, each other as of
specified dates. The assertions embodied in those
representations and warranties are subject to qualifications
and limitations agreed to by the respective parties and are
also qualified in important part by confidential disclosure
schedules delivered in connection with the Merger Agreement.
The representations and warranties may have been made for the
purpose of allocating contractual risk between the parties to
the agreements instead of establishing these matters as facts,
and may be subject to standards of materiality applicable to
the contracting parties that differ from those applicable to
investors.

IMPORTANT ADDITIONAL INFORMATION WILL BE FILED WITH THE
SEC

This Form8-K does not constitute an offer to sell or the
solicitation of an offer to buy any securities of DPRX or PLx
or the solicitation of any vote or approval. In connection with
the proposed transaction, DPRX will file with the SEC a
Registration Statement on FormS-4 containing a joint proxy
statement/prospectus. The joint proxy statement/prospectus will
contain important information about DPRX, PLx, the transaction
and related matters. DPRX and PLx will mail or otherwise
deliver the joint proxy statement/prospectus to their
respective stockholders when it becomes available. Investors
and security holders of DPRX and PLx are urged to read
carefully the joint proxy statement/prospectus relating to the
merger (including any amendments or supplements thereto) in its
entirety when it is available, because it will contain
important information about the proposed transaction.

Investors and security holders of DPRX will be able to obtain
free copies of the joint proxy statement/prospectus for the
proposed merger (when it is available) and other documents
filed with the SEC by DPRX through the website maintained by
the SEC at www.sec.gov. In addition, investors and security
holders of DPRX will be able to obtain free copies of the joint
proxy statement/prospectus for the proposed merger (when it is
available) by contacting DPRX, Attn: David Luci,
[email protected] Investors and security holders of PLx
will be able to obtain free copies of the joint proxy
statement/prospectus for the merger by contacting PLx, Attn:
Natasha Giordano, [email protected]

DPRX and PLx, and their respective directors and certain of
their executive officers, may be deemed to be participants in
the solicitation of proxies in respect of the transactions
contemplated by the agreement between DPRX and PLx. Information
regarding DPRXs directors and executive officers is contained
in DPRXs Annual Report on Form10-K for the fiscal year ended
December31, 2015, which was filed with the SEC on March22,
2016, and will also be available in the joint proxy
statement/prospectus that will be filed by DPRX with the SEC in
connection with the proposed transaction. Information regarding
PLxs directors and officers and a more complete description of
the interests of PLxs directors and officers in the proposed
transaction will be available in the joint proxy
statement/prospectus that will be filed by DPRX with the SEC in
connection with the proposed transaction. INVESTORS AND
SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT/
PROSPECTUS AND THE OTHER RELEVANT MATERIALS WHEN THEY BECOME
AVAILABLE BEFORE MAKING ANY VOTING OR INVESTMENT DECISION WITH
RESPECT TO THE PROPOSED TRANSACTIONS.

Cautionary Statement Regarding Forward-Looking
Statements

Any statements made herein relating to future financial or
business performance, conditions, plans, prospects, trends, or
strategies and other financial and business matters, including
without limitation, the potential closing date of the
transaction, the amount of DPRXs cash at closing, the prospects
for commercializing or selling any products or drug candidates,
are forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. In addition,
when or if used in this press release, the words may, could,
should, anticipate, believe, estimate, expect, intend, plan,
predict and similar expressions and their variants, as they
relate to DPRX, PLx or the management of either company, before
or after the aforementioned merger, may identify
forward-looking statements. DPRX and PLx caution that these
forward-looking statements are subject to numerous assumptions,
risks, and uncertainties, which change over time. Important
factors that may cause actual results to differ materially from
the results discussed in the forward-looking statements or
historical experience include risks and uncertainties,
including the failure by DPRX or PLx to secure and maintain
relationships with collaborators; risks relating to clinical
trials; risks relating to the commercialization, if any, of
DPRXs or PLxs proposed product candidates (such as marketing,
regulatory, product liability, supply, competition, and other
risks); dependence on the efforts of third parties; dependence
on intellectual property; and risks that DPRX or PLx may lack
the financial resources and access to capital to fund proposed
operations. Further information on the factors and risks that
could affect DPRXs business, financial conditions and results
of operations are contained in DPRXs filings with the U.S.
Securities and Exchange Commission, which are available at
www.sec.gov. The forward-looking statements represent DPRXs and
PLxs estimate as of the date hereof only, and DPRX and PLx
specifically disclaim any duty or obligation to update
forward-looking statements.

Other risks and uncertainties are more fully described in DPRXs
Annual Report on Form10-K for the year ended December31, 2015
filed with the SEC, and in other filings that DPRX makes and
will make with the SEC in connection with the proposed
transactions, including the proxy statement described above
under Important Additional Information will be Filed with the
SEC. Existing and prospective investors are cautioned not to
place undue reliance on these forward-looking statements, which
speak only as of the date hereof. The statements made herein
speak only as of the date stated herein, and subsequent events
and developments may cause our expectations and beliefs to
change. While we may elect to update these forward-looking
statements publicly at some point in the future, we
specifically disclaim any obligation to do so, whether as a
result of new information, future events or otherwise, except
as required by law. These forward-looking statements should not
be relied upon as representing our views as of any date after
the date stated herein.

Item 5.01 Changes in Control of
Registrant

The completion of the Merger will constitute a change in
control of DPRX. The Merger is described in Item 1.01 of this
Form8-K, which is incorporated by reference into this Item
5.01.

Item 5.02 Departure of Directors of
Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain
Officers

The Merger Agreement provides that, following the Merger,
Michael Valentino will be the Chairman of the Board of
Directors of DPRX and Natasha Giordano will be the Chief
Executive Officer of the combined company. Additionally,
following the Merger, it is expected that the Board of
Directors of DPRX will consist of a total of seven members, six
of whom will be designated by PLx and 1 current director of
DPRX: David P. Luci.

Item 8.01 Other Events

On December22, 2016, DPRX issued a joint press release with PLx
announcing that the companies have entered into the Merger
Agreement. A copy of the joint press release is attached hereto
as Exhibit99.1 and is incorporated by reference herein.

Item 9.01 Financial statements and
Exhibits

(d) The following exhibits are furnished with this report:

ExhibitNumber

Description

2.1*

Agreement and Plan of Merger and Reorganization dated as
of December22, 2016 by and among DPRX, PLx and Dipexium
Acquisition Corp.

10.1

Formof DPRX Voting Agreement dated as of December22, 2016
entered into by and among DPRX, PLx and certain
stockholders of DPRX.

10.2

Formof PLx Voting Agreement dated as of December22, 2016
entered into by and among PLx, DPRX and certain
stockholders of PLx.

10.3

Formof DPRX Lock-Up Agreement dated as of December22,
2016 entered into by and among DPRX, PLx and certain
stockholders of DPRX.

10.4

Formof PLx Lock-Up Agreement dated as of December22, 2016
entered into by and among PLx, DPRX and certain
stockholders of PLx.

99.1

Joint Press Release dated December22, 2016.

* All Schedules to this Merger Agreement have
been omitted from this filing to Item 601(b)(2)of Regulation
S-K. The Company will furnish copies of any schedules to the
Securities and Exchange Commission upon request.

to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.

DIPEXIUM PHARMACEUTICALS,INC.

Date: December22, 2016

/s/ David P. Luci

David P. Luci

President and Chief Executive Officer

EXHIBITINDEX

ExhibitNumber

Description

2.1*

Agreement and Plan of Merger and Reorganization dated as
of December22, 2016 by and among DPRX, PLx and Dipexium
Acquisition Corp.

10.1

Formof DPRX Voting Agreement dated as of December22, 2016
entered into by and among DPRX, PLx and certain
stockholders of DPRX.

10.2

Formof PLx Voting Agreement dated as of December22, 2016
entered into by and among PLx, DPRX and certain
stockholders of PLx.

10.3

Formof DPRX Lock-Up Agreement dated as of December22,
2016 entered into by and among DPRX, PLx and certain
stockholders of DPRX.

10.4

Formof PLx Lock-Up Agreement dated as of December22, 2016
entered into by and among PLx, DPRX and certain
stockholders of PLx.

99.1

Joint Press Release dated December22, 2016.

* All Schedules to this Merger Agreement have
been omitted from this filing


About DIPEXIUM PHARMACEUTICALS, INC. (NASDAQ:DPRX)

Dipexium Pharmaceuticals, Inc. is a late-stage pharmaceutical company. The Company is focused on the development and commercialization of Locilex (pexiganan cream 0.8%), a first-in-class, broad spectrum, topical antibiotic. Locilex is focused on the treatment of mild infections of diabetic foot ulcers (Mild DFI). As a topical antibiotic, Locilex affects only the area to which it is applied, and does not spread to the entire body through the bloodstream, which is host to a number of different bacteria other than bacteria causing the skin infection. It is conducting over two Phase III clinical trials of Locilex for the treatment of Mild DFI (DPX-305 and DPX-306) in the United States. The Company has conducted over two separate Phase I skin irritation and skin sensitization studies. Locilex has demonstrated statistical non-inferiority to a systemic antibiotic in a randomized, active-controlled double blind, multi-center clinical study in patients with Mild or Moderate DFI.

DIPEXIUM PHARMACEUTICALS, INC. (NASDAQ:DPRX) Recent Trading Information

DIPEXIUM PHARMACEUTICALS, INC. (NASDAQ:DPRX) closed its last trading session up +0.40 at 2.00 with 7,360,430 shares trading hands.

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