Heat Biologics, Inc. (NASDAQ:HTBX) Files An 8-K Entry into a Material Definitive Agreement

Item1.01.

Entry into a Material Definitive Agreement.

On March 7, 2017, Heat Biologics, Inc. (Heat) entered into a
Stock Purchase Agreement (the Purchase Agreement) with Pelican
Therapeutics, Inc. (Pelican), and certain stockholders in Pelican
(the Majority Pelican Stockholders) to purchase outstanding
capital stock of Pelican (the Acquisition). Pelican is a
biotechnology company focused on the development and
commercialization of monoclonal antibody and fusion protein-based
therapies that are designed to activate the immune system. Under
the Purchase Agreement, it is a condition to closing that holders
of at least 80% of the outstanding capital stock of Pelican on a
fully diluted basis participate in the Acquisition. Heat and
Pelican intend to provide all Pelican stockholders with the
opportunity to participate in the Acquisition by executing
Joinder Agreement to which they will become a party to the
Purchase Agreement and agree to sell at least 80% (and up to 50%)
of their shares. In order to participate in the Acquisition,
Pelican stockholders must return executed Joinder Agreement and
other related documents to Pelican by the closing of the
transaction, which is currently expected to occur no later than
April 30, 2017. The Majority Pelican Stockholders own 75.5% of
the fully diluted Pelican shares and have agreed to backstop the
Acquisition and sell additional shares of Pelican common stock in
the Acquisition (up to 50% of their shares) in order to enable
Heat to acquire 80% of the outstanding capital stock of Pelican
on a fully diluted basis.

Material Terms of the Acquisition

Subject to certain conditions, and in exchange for 80% of the
outstanding capital stock of Pelican on a fully diluted basis,
Heat has agreed at the closing of the Acquisition (the Closing):
(i) to pay to the Pelican Stockholders that execute the Stock
Purchase Agreement (the Participating Pelican Stockholders) an
aggregate of $500,000 (the Cash Consideration), and (ii) to issue
to the Participating Pelican Stockholders 1,323,021 shares of
Heat restricted common stock representing 4.99% of the
outstanding shares of Heat common stock on the date of execution
of the Purchase Agreement (the Stock Consideration), which
issuance will be exempt from registration to Section 4(a)(2) of
the Securities Act of 1933, as amended. The Cash Consideration
will be reduced by the amount by which certain of Pelicans
accrued liabilities are not satisfied for less than $250,000. The
Cash Consideration and Stock Consideration will be placed into
escrow, for a period of up to six months to secure certain
indemnification and other obligations of Pelican and the
Participating Pelican Stockholders in connection with the
Acquisition. The Cash Consideration and the Stock Consideration,
if not used to satisfy indemnification obligations, will be paid
to the Participating Pelican Stockholders on a pro rata
basis based on each such Participating Pelican Stockholders
equity interest in Pelican as compared to the aggregate Pelican
equity interests held by all Participating Pelican Stockholders.

In addition to the payments described above, under the terms of
the Purchase Agreement, Heat agreed to cause Pelican to make cash
payments to the Participating Pelican Stockholders upon the
achievement of the following clinical and commercialization
milestones, as well as low single digit royalty payments and
payments upon receipt of sublicensing income:

(1)

$2,000,000 upon Pelicans dosing of the first patient in its first
Phase 1 trial for an oncology indication;

(2)

$1,500,000 upon Pelicans dosing of the first patient in its first
Phase 2 trial for an oncology indication;

(3)

$3,000,000 upon successful outcome of the first Phase 2 trial for
an oncology indication;

(4)

$6,000,000 upon Pelicans dosing of the first patient in its first
Phase 3 trial for an oncology indication;

(5)

$3,000,000 upon Pelicans dosing of the first patient in its first
Phase 3 trial for a non-oncology indication;

(6)

$7,500,000 upon successful outcome of the first Phase 3 trial for
an oncology indication;

(7)

$3,000,000 upon successful outcome of the first Phase 3 trial for
a non-oncology indication;

(8)

$7,500,000 upon acceptance of a Biologics License Application
(BLA) submission for an oncology indication;

(9)

$3,000,000 upon acceptance of a BLA submission for a non-oncology
indication;

(10)

$7,500,000 upon first product indication approval in the United
States or Europe for an oncology indication;

(11)

$3,000,000 upon first product indication approval in the United
States or Europe for a non- oncology indication; and

Pelican has been awarded a $15.2 million grant to fund
preclinical and some clinical activities from the Cancer
Prevention and Research Institute of Texas (CPRIT). The CPRIT
grant is subject to customary CPRIT funding conditions. Heat
intends to lend Pelican up to $910,231 to satisfy Pelicans
matching fund obligation under the CPRIT Grant that will allow it
to access the first year of the CPRIT grant funding in the amount
of $1,820,462 and has agreed to loan Pelican approximately
$250,000 to pay Pelicans legal fees and expenses incurred in
connection with the Acquisition.

The Purchase Agreement contains customary representations,
warranties and covenants of Heat, Pelican and the Participating
Pelican Stockholders. Subject to certain customary limitations,
the Participating Pelican Stockholders have agreed to indemnify
Heat and its officers and directors against certain losses
related to, among other things, breaches of Pelicans and the
Participating Pelican Stockholders representations and
warranties, certain specified liabilities and the failure to
perform covenants or obligations under the Purchase Agreement.

In connection with the Acquisition, it is a condition to closing
that Heat and the Participating Pelican Stockholders enter into a
Stockholders Agreement (the Stockholders Agreement) with respect
to the Pelican common stock retained by the Participating Pelican
Stockholders (the Retained Shares). The Stockholders Agreement,
contains restrictions on transfer of the Retained Shares and
drag-along rights in the event of a consolidation or merger of
Pelican with another entity after the date of the Purchase
Agreement or the sale of all or substantially all of Pelicans
assets or a transaction in which at least fifty percent (50%) of
the voting rights attached to the Pelican securities are sold. In
addition, Participating Pelican Stockholders will have co-sale
rights in connection with Heats transfer of the Pelican Shares
that Heat owns.

Cassel Salpeter Co. served as financial advisor to the special
committee of Heats board of directors and Geller Biopharm served
as financial advisor to the special committee of Pelicans board
of directors and Pelican stockholders.

The foregoing summaries of the Purchase Agreement and the
Stockholders Agreement do not purport to be complete and are
qualified in their entirety by reference to the full texts of the
Purchase Agreement that is filed herewith as Exhibit10.1 and the
Stockholders Agreement that is filed as an exhibit thereto.

The representations, warranties and covenants contained in the
Purchase Agreement were made only for purposes of such agreement
and as of specific dates, were solely for the benefit of the
parties to the Purchase Agreement, and may be subject to
limitations agreed upon by the contracting parties. Accordingly,
the Purchase Agreement is incorporated herein by reference only
to provide investors with information regarding the terms of the
Purchase Agreement, and not to provide investors with any other
factual information regarding Heat, Pelican or either of their
businesses, and should be read in conjunction with the
disclosures in Heats periodic reports and other filings with the
Securities and Exchange Commission.

About the Majority Pelican Stockholders

Jeff Wolf, Heats President, Chief Executive Officer and Chairman
of the board of directors, through one or more of his affiliated
entities, and Edward Smith, a member of Heats board of directors,
and entities controlled by Mr. Smith are Participating Pelican
Stockholders and have agreed to sell a minimum of 80% and a
maximum of 50% of their shares of the capital stock of Pelican in
order to meet the 80% closing condition, on the same terms as the
other Participating Pelican Stockholders. Mr. Wolf is the
managing member of a limited liability company that owns 60.1% of
the outstanding capital stock of Pelican and Mr. Wolf directly
and through entities owned by him owns 31.6% of the membership
interests of the limited liability company. Mr. Smith directly
and through entities that he controls holds approximately 10.2%
of Pelicans outstanding capital stock and Mr. Smith directly and
indirectly through an entity he controls owns an aggregate of
23.1% of the membership interests of the limited liability
company. Taylor Schreiber, M.D., Ph.D., the Chairman of Heats
Scientific Advisory Board and a member of the Pelican board of
directors, holds less than 1% of Pelicans total outstanding
capital stock and indirectly through an entity he controls, owns
5% of the limited liability company. Dr. Schreiber has agreed to
sell a minimum of 80% and a maximum of 50% of his shares of the
capital stock of Pelican in order to meet the 80% closing
condition, on the same terms as the other Participating Pelican
Stockholders. John Monahan, Ph.D., a member of the board of
directors of Heat owns 0.46% of the limited liability company. In
addition, a trust for which Mr. Wolf does not serve as the
trustee for the benefit of Mr. Wolfs children directly owns 2.2%
of Pelicans total outstanding capital stock and owns 10% of the
membership interests of the limited liability company. Mr. Wolf
disclaims beneficial ownership of all shares held by the trust.
Due to these potential conflicts, each of Heat and Pelican formed
Special Committees of independent members of their board of
directors to review and negotiate the Acquisition.

About Pelican

Pelican, was formed in April 23, 2009 as a subsidiary of Heat to
develop and commercialize monoclonal antibody and fusion
protein-based therapies that are designed to activate the immune
system and was divested from Heat in 2012.

CPRIT Grant

In May 2016, Pelican was awarded a $15.2 million grant (the CPRIT
Grant) from CPRIT for development of Pelicans lead product
candidate, PTX-25. The CPRIT Grant is expected to allow Pelican
to develop PTX-25 through a 70-patient Phase 1 clinical trial.
The Phase 1 clinical trial will be designed to evaluate PTX-25 in
combination with other immunotherapies. The CPRIT Grant is
subject to customary CPRIT funding conditions including a
matching funds requirement where Pelican will match $0.50 for
every $1.00 from CPRIT. Consequently, Pelican is required to
raise $7.6 million in matching funds over the three year project.
Heat intends to provide the initial $910,231 to satisfy the
Pelican CPRIT matching funds obligation that will allow it to
access the first fiscal year (June 2016 through May 2017) of the
grant funding in the amount of $1,820,462. For the second fiscal
year (June 2017 through May 2018) of the award, Pelican must
provide matching funds of $3,177,507 in order for CPRIT to
provide $6,355,014 of grant funding. For the third fiscal year
(June 2018 through May 2019) of the award Pelican must provide
matching funds of $3,534,873 in order for CPRIT to provide
$7,069,746 of grant funding.

The grant award, as is customary for all CPRIT awards, will
contain a requirement that Pelican pay CPRIT a royalty on sales
of commercial products developed using CPRIT funds equal to
between three and five percent of revenue until such time as
CPRIT has been paid an aggregate amount equal to 400% of the
grant award proceeds. After 400% of the grant award proceeds has
been paid, Pelican will pay CPRIT a royalty of 0.5% in
perpetuity.

Pelicans Product Candidates

Pelicans lead product candidate is PTX-25, a humanized monoclonal
antibody, and its second product candidate is PTX-15, a fusion
protein. These agents target a pair of tumor necrosis factor
(TNF) molecules known as TL1A and TNFRSF25. We believe these two
molecules can provide precise control of inflammatory responses.
PTX-25 targets TNFRSF25 and is intended for use in oncology
patients and falls into an emerging class of oncology compounds
known as Immuno-Oncology agents. PTX-25 is a T cell costimulator
that we believe has advantages over other compounds in
development by several large pharmaceutical companies. PTX-15 is
a follow-on product that we believe can provide precise control
of the regulatory arm of our immune system and can be used in
immuno-oncology or to prevent inflammation in autoimmune disease
and transplantation.

Pelicans cancer therapy solution is to harness the body’s
natural tolerance mechanisms to develop therapies that reprogram
the immune system and provide a long-term, durable effect after a
short course of therapy. Pelicans therapies are based upon its
unique understanding of the immune system and the mechanisms it
uses to generate an immune system response employing the inbuilt
tolerance mechanisms of the bodys immune cells
(i.e., a tolerogenic response). Classical
immunogenic responses are initiated when antigen-presenting cells
(APCs) present an antigen to CD4 T helper (Th) lymphocytes,
resulting in T cell activation, proliferation, and
differentiation of effector Th1 and Th2 lymphocytes. In the
classical immune response, Th1 and Th2 cells dominate over
T-regulatory cells and initiate antigen removal. Similarly,
tolerance induction begins with the same initial steps of the
pathway (i.e., antigen presentation and T cell
activation), but the abundance of antigen, how it is presented to
the T cell, and the availability of CD4 cell assistance can lead
to the proliferation of a new class of lymphocytes called
T-regulatory cells. Just as Th effector cells mediate a classical
immune response, Treg cells are the mediators of a tolerogenic
response. The dominance of T-regulatory cells over effector cells
results in antigen preservation and immunological tolerance.
Pelican is developing therapies that deliberately shift the
balance of these reciprocating immune responses to achieve a
specific therapeutic effect. As these therapies are based on
natural, existing components of the immune system, Pelican
expects they will be safer, longer-lasting, and more effective
than traditional medicines after only a short course of therapy.

Potential Benefits of the Acquisition

Heat believes acquiring Pelican is attractive because it:

Strengthens its ability to advance new and synergistic
immuno-oncology (I-O) combinations and to improve patient
outcomes

Expands the potential combinations to explore with checkpoint
inhibitors and its T cell-activating technologies

Includes Pelicans PTX-25, which it believes has the potential to
dramatically improve the durability of responses due to its
preferential specificity for stimulating the production of memory
CD8 T cells

Broadens its current pipeline with the addition of T cell
costimulators targeting TNFRSF25 that are believed to be
synergistic with Heats current pipeline

Has published strong preclinical data for its mechanism of action
I-O. TNFRSF25 is the most recently discovered T cell costimulator
and a rapidly-emerging potential best-in-class T cell
costimulator due to its preferential specificity for stimulating
the production of memory CD8 T cells.

Is the only company with disclosed TNFRSF25 agonist antibodies
and foundational intellectual property based on them

Offers non-dilutive funding through a $15.2M CPRIT grant to
advance its lead product candidate through completion of Phase 1,
reducing costs of product development by two-thirds.

Recent Pelican Developments

Completed humanization of PTX-25

Completed the process for PTX-25 of mapping the binding sites, or
epitopes, of antibodies on their target antigens strengthening
its intellectual property position

Completed stability/developability studies with the lead antibody

Completed studies for PTX-25 testing the ability of T cells to
mature and produce antibodies with an increased affinity for
their target antigens during the course of an immune response;
further strengthening its intellectual property position. The new
antibody is four times more potent than Pelicans original
antibody

Pelicans Intellectual Property

Under license agreements with a large university (the
University), Pelican has obtained exclusive rights to five
different patent families each directed to therapeutic
compositions and methods related to targeting TNFRSF25/TL1A for
the purpose of modulating immune responses. These families
comprise four PCT applications, five granted patents, fourteen
patent validations in European countries, and twenty-three other
pending patent applications. These patents and applications cover
the United States, Europe and Japan as well as several other
countries having commercially significant markets. As partial
consideration for the initial two license agreements with the
University, Pelican issued the University 300,000 shares of its
common stock.

As consideration for the rights granted under the initial license
agreement,Pelican is obligated to pay the University certain
upfront license fees, milestone payments (upon submission of an
IND, completion of Phase 1 clinical trial and the earlier of May
2022 and approval of an IND of an aggregate of $400,000), an
annual minimum royalty payment $20,000 and royalties (mid-range
single digits) based on net sales on commercialized products
covered by the patent-related rights set forth above. As
consideration for the rights granted under the second license
agreement,Pelican is obligated to pay the University certain
upfront license fees, milestone payments (upon submission of an
IND, completion of Phase 1 clinical trial and the earlier of May
2022 and approval of an IND of an aggregate of $650,000), an
annual minimum royalty payment $20,000 and royalties (mid-range
single digits) based on net sales on commercialized products
covered by the patent-related rights set forth above. As
consideration for the rights granted in the third license
agreement,Pelican is obligated to pay the University certain
upfront license fees, past and future patent costs, an annual
minimum royalty payment $20,000 and royalties (mid-range single
digits) based on net sales on commercialized products covered by
the patent-related rights set forth above. The third license
agreement with the University provides that in the event that
Pelican terminates its second license agreement with the
University, Pelican is obligated to pay the University an annual
minimum royalty payment of $20,000 for each year after 2014
during the term of the third license agreement as well as
milestone payments that aggregate $400,000 upon achievement of
the following milestones: (i) upon submission of an IND; (ii)
upon approval of an IND; (iii) upon completion of a Phase 1
clinical trial and by the earlier of May 31, 2022 or approval of
an NDA. Under the third license agreement, the royalties are
equal to a percent (mid-range single digits) of net sales of
products covered by the patent-related rights in the respective
license agreement. These royalty rates are subject to reduction
if additional license rights from third parties are required to
commercialize licensed products. In the event of a sublicense to
a third party, Pelican is obligated to pay royalties to the
University equal to a percentage of what it would have been
required to pay to the University had it sold the products under
the sublicense itself. The third license agreement also provides
that Pelican will not have to pay more than above royalty rates
and sublicense fees if more than one license from the University
is required to sell products covered by the licensed
patent-related rights.

Risk Factors Specific to the Acquisition

The Acquisition of Pelican involves many risks and
uncertainties. Investors should carefully consider the risks
described below in addition to the risk factors set forth in
Heats annual report and quarterly reports that are filed with the
Securities and Exchange Commission before purchasing Heats
securities. Additional risks, uncertainties and other factors not
presently known to Heat or that Heat currently deems immaterial
may also impair its business operations.

If the conditions to the Acquisition are not met, the
Acquisition will not occur.

Specified conditions must be satisfied or waived in order to
complete the Acquisition, including, among others:

participation in the Acquisition by the holders of at least 80%
of the outstanding equity of Pelican on a fully diluted basis;

approval of the NASDAQ Capital Market of the issuance of the
shares of Heat common stock to be issued to the Pelican
stockholders in the Acquisition;

the respective representations and warranties of Heat and Pelican
shall be true and correct in all material respects as of the date
of the Purchase Agreement and the closing;

execution of contracts with respect to the CPRIT grant, subject
to Heat committing to provide certain funding to Pelican by March
31, 2017;

execution of the Stockholders Agreement and Accredited Investor
Questionnaire by each Participating Pelican Stockholder;

performance or compliance in all material respects by Heat and
Pelican with their respective covenants and obligations in the
Purchase Agreement;

Pelican shall have obtained any consents and waivers of approvals
required in connection with the Acquisition; and

no material adverse effect with respect to Heat or Pelican or its
subsidiaries shall have occurred since the date of the Purchase
Agreement.

These and other conditions are described in detail in the
Purchase Agreement, which is filed as Exhibit 10.1 to this
Current Report on Form 8-K. Heat and Pelican cannot assure you
that all of the conditions to the Acquisition will be satisfied.
If the conditions to the Acquisition are not satisfied or waived,
the Acquisition will not occur or will be delayed, and Heat and
Pelican each may lose some or all of the intended benefits of the
Acquisition.

Several of Pelicans directors have conflicts of
interest that may influence them to support or approve the
Acquisition without regard to your interests.

Jeffrey Wolf and Edward Smith serve on the board of directors of
Heat and Pelican and are expected to continue to serve on the
board of directors of Heat following the consummation of the
Acquisition. Taylor Schreiber, M.D., Ph.D., serves as the
Chairman of Heats Scientific Advisory Board and serves on
Pelicans board of directors. John Monahan, Ph.D. a director of
Heat, is a member of the limited liability company that owns
shares of common stock of Pelican. They each have a direct or
indirect financial interest in both Pelican and Heat. See About
the Majority Pelican Stockholders above for a more detailed
discussion regarding the ownership interests in Heat and Pelican
of each of Jeffrey Wolf, Edward Smith, Taylor Schreiber and John
Monahan.

The consideration to be received for the Pelican
Shares is not adjustable based on the market price of Heat common
stock, therefore the Acquisition consideration at the closing may
have a greater or lesser value than it had at the time the
Purchase Agreement was signed.

Included in the consideration to be paid to the Pelican
stockholders for the Pelican common stock is a fixed number of
shares of Heat common stock. Any changes in the market price of
Heat common stock will not affect the number of shares holders of
Pelican common stock will be entitled to receive upon
consummation of the Acquisition. Therefore, if the market price
of Heat common stock increases from the market price on the date
of the Purchase Agreement prior to the consummation of the
Acquisition, Pelican stockholders could receive Acquisition
consideration with considerably more value. The Purchase
Agreement does not include a price-based termination right.

In order to develop Pelicans product candidates and
receive the grant funding awarded by CPRIT, Heat will have to
devote significant resources to Pelican.

Neither Heat nor Pelican are expected to derive revenue from any
source in the near future until they or their potential partners
successfully commercialize products. The CPRIT Grant requires
that Pelican provide matching funds for one half of the award
amount in order for Pelican to receive the grant funding. In
order to receive the full $15.2 million award over three years,
Pelican must raise matching funds in the aggregate amount of
$7,622,611. The grant award contract cannot be executed until the
matching funds for the first fiscal year (June 2016 through May
2017) of the award ($910,231) are obtained. Once Pelican has
received matching funds in the amount of $910,231, the grant
award in the amount of $1,820,462 for the first contract fiscal
year will be available to Pelican from CPRIT. For the second
fiscal year (June 2017 through May 2018) of the award, Pelican
must provide matching funds of $3,177,507 in order for CPRIT to
provide $6,355.014 of grant funding. For the third fiscal year
(June 2018 through May 2019) of the award Pelican must provide
matching funds of $3,534,873 in order for CPRIT to provide
$7,069,746 of grant funding. In addition, Heat has agreed to loan
Pelican approximately $250,000 to pay Pelicans legal fees and
expenses incurred in connection with the Acquisition. Heats
financial statements have been prepared under the assumption that
it will continue as a going concern; however, Heat has incurred
significant losses from operations to date and expects its
expenses to increase in connection with its ongoing activities,
and the addition of Pelicans activities. There can be no
assurance that funding will be available on acceptable terms on a
timely basis, or at all. The various ways that Heat could raise
capital carry potential risks. Any additional sources of
financing will likely involve the issuance of Heats equity
securities, which will have a dilutive effect on Heats
stockholders. If Heat raises funds through collaborations and
licensing arrangements, Heat might be required to relinquish
significant rights to its technologies or tests or grant licenses
on terms that are not favorable to Heat. If Heat does not succeed
in raising additional funds on acceptable terms, it may be unable
to complete planned preclinical and clinical trials, access the
CPRIT award or obtain approval of its product candidates from the
FDA and other regulatory authorities.

If Pelican is unable to hire additional qualified
personnel, its ability to utilize the CPRIT grant will be
forfeited.

In order to access the CPRIT grant a majority of Pelicans
employees must reside in Texas as well as its Chief Executive
Officer and other executive officers. Pelican has identified
qualified individuals and will have to negotiate agreements with
each identified individual and will also need to hire such
additional qualified personnel with expertise in preclinical
testing, clinical research and testing, government regulation,
formulation and manufacturing, sales and marketing and accounting
and financing. Pelican will compete for qualified individuals
with numerous biopharmaceutical companies, universities and other
research institutions. Competition for such individuals is
intense, and there can be no assurance that the search for such
personnel will be successful. Attracting and retaining qualified
personnel will be critical to Pelicans access to the CPRIT grant.

The Stock Consideration issuable to the Pelican
Stockholders in the Acquisition will cause the Heat stockholders
to experience dilution.

The issuance of the Stock Consideration to the Pelican
Stockholders will dilute an investor’s equity ownership in Heat
by approximately 4.99% and, as a result, could have the effect of
depressing the market price for our securities, especially if the
anticipated benefits of the Acquisition do not materialize or
otherwise result in increased stockholder value or revenue stream
to the combined company.

Heats stock price is expected to continue to be
volatile, and the market price of its common stock may drop
following the acquisition.

The market price of Heats common stock could be subject to
significant fluctuations following the Acquisition. Moreover,
Heat in general has experienced substantial volatility that has
often been unrelated to the operating performance of Heat and the
stock market in general has been subject to volatility often
unrelated to any individual company performance. These broad
market fluctuations may adversely affect the trading price of the
Heat common stock after the Acquisition. Set forth below is the
range of the high and low sales prices of Heats common stock for
the year ended December 31, 2015 and the year ended December 31,
2016 on a quarterly basis.

		High			Low
YEAR ENDED DECEMBER 31, 2015
First Quarter		$	8.30		$	3.99
Second Quarter		$	8.35		$	5.73
Third quarter		$	6.58		$	3.42
Fourth quarter		$	4.50		$	1.84
YEAR ENDED DECEMBER 31, 2016
First Quarter		$	4.32		$	0.68
Second Quarter		$	0.80		$	0.46
Third Quarter		$	1.81		$	0.66
Fourth Quarter		$	3.23		$	0.70

During November 2016, daily trading volume has ranged from
250,000 shares to in excess of 20,000,000 shares. During December
2016 daily trading volume ranged from 600,000 shares to in excess
of 13,000,000 shares. During January 2017, daily trading volume
ranged from 250,000 shares to in excess of 8,000,000 shares.

In the past, following periods of volatility in the market price
of a company’s securities, stockholders have often instituted
class action securities litigation against those companies. Such
litigation, if instituted, could result in substantial costs and
diversion of management attention and resources, which could
significantly harm the combined company’s profitability and
reputation.

The combined company may not experience the
anticipated strategic benefits of the Acquisition.

The respective management of Heat and Pelican believes that the
Acquisition would provide certain strategic benefits that may not
be realized by each of the companies if Pelican is not acquired
by Heat. Specifically, Heat believes the Acquisition would
provide certain strategic benefits which would enable Heat to
accelerate its business plan through an increased access to
capital in the public equity markets. The market price of Heats
common stock may decline as a result of the Acquisition if the
combined company does not achieve the perceived benefits of the
Acquisition as rapidly or to the extent anticipated by Heat or
Pelican or investors, financial or industry analysts. There can
be no assurance that these anticipated benefits of the
Acquisition will materialize or that if they materialize will
result in increased stockholder value or revenue stream to the
combined company.

Heat may be unable to successfully integrate the
Pelican businesses with its current management and
structure.

Heats failure to successfully complete the integration of Pelican
could have an adverse effect on our prospects, business
activities, cash flow, financial condition, results of operations
and stock price. Integration challenges may include the
following:

assimilating Pelicans technology and retaining personnel in Texas
as required by the CPRIT grant award;

estimating the capital, personnel and equipment required for
Pelican based on the historical experience of management with the
businesses they are familiar with;

minimizing potential adverse effects on existing business
relationships;

successfully developing the new products and services; and

coordinating our efforts throughout various distant localities
such as Texas where Pelican is headquartered and must remain
headquartered in order to access the CPRIT grant award.

Pelican has had limited operations to
date.

Pelican is a start-up entity and has had limited operations to
date. As a start-up entity, Pelican is subject to many of the
risks common to such enterprises, including its ability to
implement its business plan, market acceptance of its proposed
business and products, under-capitalization, cash shortages,
limitations with respect to personnel, financing and other
resources, competition from better funded and experienced
companies, and uncertainty of its ability to generate revenues.
There is no assurance that its activities will be successful or
will result in any revenues or profit, and the likelihood of its
success must be considered in light of the stage of its
development. Even if it generates revenue, there can be no
assurance that it will be profitable. In addition, no assurance
can be given that it will be able to consummate its business
strategy and plans, as described herein, or that financial,
technological, market, or other limitations may force it to
modify, alter, significantly delay, or significantly impede the
implementation of such plans. Pelican has insufficient results
for investors to use to identify historical trends or even to
make quarter to quarter comparisons of its operating results.
Pelicans revenue and income potential is unproven and its
business model is continually evolving. Pelican is subject to the
risks inherent to the operation of a new business enterprise, and
there can be no assurance that Pelican will be able to
successfully address these risks.

Pelican has a limited operating history upon which to
evaluate its ability to commercialize its
products.

Pelican is a development-stage company and its success is
dependent upon its ability to develop and commercialize its
products and it has not demonstrated an ability to perform the
functions necessary for the successful development and
commercialization of any product candidates. The successful
commercialization of any product candidates will require Pelican
to perform a variety of functions, including:

continuing to undertake preclinical development trials and
initiating clinical trials;

participating in regulatory approval processes and obtaining
regulatory approvals;

formulating and manufacturing products; and

conducting sales and marketing activities.

Pelicans operations have been limited to organizing and staffing
Pelican, acquiring, developing and securing its proprietary
technology and undertaking preclinical studies of its product
candidates. Pelican has yet to engage in any clinical trials and
therefore the safety of its product candidates is uncertain.

Pelican has generated operating losses and
experienced negative cash flows and it is uncertain whether it
will achieve profitability.

For the year ended December 31, 2016, Pelican incurred a net loss
of ($703,736). At December 31, 2016, Pelican had an accumulated
deficit of ($3,042,685), a stockholders deficit of ($990,299) and
a working capital deficiency of ($553,471). Pelican will continue
to incur operating losses until such time, if ever, as it is able
to achieve sufficient levels of revenue from operations. Its
ability to achieve profitability will depend on the market
development and acceptance of its product offerings and its
capacity to develop, introduce and sell its products to its
targeted markets. There can be no assurance that Pelican will
ever generate significant sales or achieve profitability.
Accordingly, the extent of future losses and the time required to
achieve profitability, if ever, cannot be predicted at this
point.

It is expected that Pelican will experience negative cash flows
for the foreseeable future as it funds its operating losses and
capital expenditures. As a result, Heat may seek to raise
additional funding in the future in order to obtain matching
funds under the CPRIT Grant. Heat may not be able to raise
additional funding on favorable terms or at all.

Pelicans independent auditor has expressed
substantial doubt about its ability to continue as a going
concern.

Pelicans consolidated financial statements as of December31, 2016
have been prepared under the assumption that it will continue as
a going concern for the next twelve months. Its independent
auditor has issued a report that includes an explanatory
paragraph referring to its recurring losses from operations and
expressing substantial doubt in its ability to continue as a
going concern without additional capital becoming available.
Pelicans ability to continue as a going concern is dependent upon
its ability to obtain additional equity or debt financing, attain
further operating efficiencies, reduce expenditures, and,
ultimately, to generate revenue. Pelicans consolidated financial
statements as of December31, 2016 did not include any adjustments
that might result from the outcome of this uncertainty. If
Pelican cannot continue as a viable entity, Heat and its other
stockholders may lose some or all of their investment in Pelican.

Pelicans product candidates are in early stages of
clinical trials.

Because Pelicans product candidates are in early stages of
development they will require extensive preclinical and clinical
testing. Pelicans lead product has not yet entered clinical
trials and cost, speed and ability to advance through clinical
trials is uncertain. Pelican cannot predict with any certainty if
or when it might submit a Biologics License Application (BLA) for
regulatory approval for any of its product candidates or whether
any such BLA will be accepted.

Pelican relies on licenses to use various
technologies that are material to its business and if the
agreements were to be terminated, it
would halt its ability to market its products and
technology, as well as have an immediate material adverse effect
on its business, operating results and financial
condition.

Pelican has licensing agreements with the University granting it
the right to use certain critical intellectual property. The
terms of the licensing agreements continue until the end of the
life of the last patent to expire. If Pelican breaches the terms
of these licensing agreements, including any failure to make
minimum royalty payments required thereunder or failure to reach
certain developmental milestones such as use best efforts to
introduce a licensed product in certain territories by 2020, the
licensor has the right to terminate the license. If Pelican were
to lose or otherwise be unable to maintain these licenses on
acceptable terms, it would halt its ability to market its
products and technology, which would have an immediate material
adverse effect on its business, operating results and financial
condition.

Pelican may be unable to generate sufficient revenues
to meet the minimum royalties or developmental milestones
required under its license agreements or to pay outstanding
obligations.

For the year ended December 31, 2017 and thereafter Pelicans
minimum royalty obligations (exclusive of any milestone payments)
under Pelicans licensing agreements are $40,000 annually. No
assurance can be given that Pelican will generate sufficient
revenue or raise additional financing to make these minimum
royalty payments. The license agreements also provide for certain
developmental milestones. No assurance can be given that Pelican
will meet all of the required developmental milestones. Any
failure to make the payments or reach the milestones required by
the license agreements would permit the licensor to terminate the
license. If Pelican were to lose or otherwise be unable to
maintain these licenses, it would halt its ability to market its
products and technology, which would have an immediate material
adverse effect on its business, operating results and financial
condition.

There is uncertainty as to market acceptance of
Pelicans technology and products.

Pelican has conducted its own research into the markets for its
products; however, because it will be a new entrant into the
market, it cannot guarantee market acceptance of its products and
have somewhat limited information on which to estimate
anticipated level of sales. Pelicans products will require
patients and doctors to adopt its technology. Pelicans industry
is susceptible to rapid technological developments and there can
be no assurance that it will be able to match any new
technological advances. If it is unable to match the
technological changes in the needs of its customers the demand
for its products will be reduced.

Item8.01.

Other Events.

On March 8, 2017, Heat issued the press release attached hereto
as Exhibit 99.1 announcing entering into the Purchase Agreement.

Item9.01.

Financial Statements and Exhibits.

(a)

Financial statements of businesses acquired.

The financial statements required by Item 9.01(a) of Form 8-K
will be filed with the Securities and Exchange Commission if
deemed to be required within the requisite filing period.

(b)	Pro forma financial information.

The pro forma financial information required by Item9.01(b) of
Form 8-K will be filed if deemed to be required within the
requisite filing period.

(d) Exhibits.

10.1		*Stock Purchase Agreement, dated March 7, 2017, by and among Heat Biologics, Inc., Pelican Therapeutics, Inc., the stockholders of Pelican Therapeutics, Inc. party thereto
99.1		Press release, dated March 8, 2017
99.2		Audited Financial Statements of Pelican Therapeutics, Inc. for the year ended December 31, 2016

* the schedules have been omitted to Item 601(b)(2) of Regulation
S-K. A copy of any omitted schedule will be furnished
supplementally to the SEC on request.

About Heat Biologics, Inc. (NASDAQ:HTBX)

Heat Biologics, Inc. is a development-stage company focused on developing allogeneic, off-the-shelf cellular therapeutic vaccines to combat a range of cancers. The Company is an immuno-oncology company, which focuses on T cell-stimulating platform technologies, such as Immune Pan-Antigen Cytotoxic Therapy (ImPACT) and Combination Pan-Antigen Cytotoxic Therapy (ComPACT). Using its ImPACT platform technology, the Company has developed HS-410 (vesigenurtacel-L) as a product candidate to treat non-muscle invasive bladder cancer (NMIBC), and HS-110 (viagenpumatucel-L), which is intended for use in combination with an anti-PD-1 checkpoint inhibitor, as a potential treatment for patients with non-small cell lung cancer (NSCLC). Using its ComPACT platform technology, it has developed HS-120 as a potential treatment for NSCLC. It is conducting a Phase II trial of HS-410 in patients with NMIBC, and a Phase Ib trial of HS-110, in combination with nivolumab (Opdivo) to treat patients with NSCLC.

Heat Biologics, Inc. (NASDAQ:HTBX) Recent Trading Information

Heat Biologics, Inc. (NASDAQ:HTBX) closed its last trading session down -0.008 at 0.830 with 199,242 shares trading hands.