PHARMATHENE, INC. (NYSEMKT:PIP) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01.
| Entry into a Material Definitive Agreement. |
On January 18, 2017, PharmAthene,Inc., a Delaware corporation
(PharmAthene), entered into an agreement and plan of merger and
reorganization (the Merger Agreement), to which its wholly-owned
subsidiary, Mustang Merger Sub, Inc., will be merged with and
into Altimmune, Inc., a Delaware corporation (Altimmune), with
Altimmune as the surviving subsidiary (Merger 1), and immediately
thereafter, Altimmune will be merged with and into Mustang Merger
Sub LLC, with Mustang Merger Sub LLC as the surviving entity in
such merger (Merger 2, and together with Merger 1, the Mergers).
Following the consummation of the Mergers, PharmAthene will
change its name to Altimmune. The Mergers are intended to qualify
as a reorganization within the meaning of Section368(a)of the
Internal Revenue Code of 1986, as amended.
to the terms and conditions of the Merger Agreement, at the
effective time of Merger 1 (the Effective Time), each of
Altimmunes outstanding shares of common stock and preferred stock
(excluding Altimmune treasury shares, shares of Altimmune owned
by PharmAthene or its subsidiaries or dissenting shares) will be
converted into the right to receive a number of shares of
PharmAthene common stock such that the holders of outstanding
equity of Altimmune immediately prior to the Effective Time will
own 58.2% of the outstanding equity of PharmAthene immediately
following the Effective Time and holders of outstanding equity of
PharmAthene immediately prior to the Effective Time will own
41.8% of the outstanding equity of PharmAthene immediately
following the Effective Time (the Exchange Ratio). No fractional
shares of PharmAthene common stock will be issued in connection
with the Mergers as a result of the conversion described above,
and any fractional share of PharmAthene common stock that would
thereby be issuable will be rounded up to the next whole share.
In addition, all outstanding Altimmune options, as well as
Altimmunes 2001 Employee Stock Option Plan and its Non-Employee
Stock Option Plan, each as amended from time to time, will be
assumed by PharmAthene. Each option or warrant to purchase one
share of Altimmune common stock will be converted into an option
or warrant, as the case may be, to purchase a number of shares of
PharmAthene common stock representing the number of Altimmune
shares for which the exchanged option or warrant was exercisable
multiplied by the Exchange Ratio. The exercise price will be
proportionately adjusted.
In connection with the Merger Agreement, Altimmune has entered
into a definitive financing agreement (the Altimmune Financing
Agreement) with certain of its stockholders, to which such
stockholders have irrevocably committed to: (i) participate in a
private placement transaction by Altimmune (the Altimmune Private
Placement) of its convertible securities in an aggregate amount
of not less than $3.5 million of gross proceeds for Altimmune
that is to be received by Altimmune prior to the Effective Time
and (ii) participate in a private placement of PharmAthene common
stock to raise an aggregate of not less than $5.0 million of
gross proceeds for PharmAthene to be received by PharmAthene
within 135 days of the closing date of the Mergers (the
Post-Closing Private Placement).
At the Effective Time, a pro rata share of PharmAthene common
stock representing ten percent of the merger consideration
issuable to the stockholders of Altimmune will serve to secure
the Altimmune stockholders indemnification obligations under the
Merger Agreement and will be deposited with Continental Stock
Transfer Trust, as escrow agent under a separate escrow agreement
to be entered into prior to the Effective Time. The escrow period
will expire twelve months from the Effective Time.
The Merger Agreement provides that at, and immediately after, the
Effective Time the size of PharmAthenes Board of Directors (the
Board) will initially consist of seven directors. This Board will
be comprised of four directors designated by Altimmune and three
directors designated by PharmAthene. Altimmunes current chief
executive officer, Bill Enright, is expected to serve as the
chief executive officer of the combined company, and Altimmunes
current chief financial officer, Elizabeth Czerepak, is expected
to serve as its chief financial officer.
The Merger Agreement also obligates PharmAthene to submit to its
stockholders, at a special stockholder meeting, a proposal to
approve the Mergers, approve and adopt an amendment to its
Certificate of Incorporation to authorize its Board of Directors
to effect a reverse stock split prior to the Effective Time at a
reverse stock split ratio in the range mutually agreed to by
Altimmune and PharmAthenes Board of Directors, and approve
certain other related proposals specified in the Merger
Agreement.
Each of PharmAthene and Altimmune have made customary
representations, warranties and covenants in the Merger
Agreement. All such representations and warranties of Altimmune
(but not PharmAthene) will survive the completion of the Mergers
and remain in full force and effect until twelve months after the
closing date of the Mergers. Completion of the Mergers is subject
to a number of conditions, including, among other things,
approval by the stockholders of PharmAthene and Altimmune.
The Merger Agreement contains certain termination rights for each
of PharmAthene and Altimmune, and further provides that, upon
termination of the Merger Agreement under limited specified
circumstances following receipt of a superior offer, PharmAthene
may be required to pay Altimmune a termination fee of $2,000,000.
In connection with the termination of the Merger Agreement upon
certain circumstances, either party may be required to pay the
other partys third party expenses up to $1,000,000. The
termination of the Merger Agreement will not relieve any party
thereto from any liability or damages resulting from or arising
out of any fraud or willful or intentional breach of any
representation, warranty, covenant, obligation or other provision
contained in the Merger Agreement.
PharmAthene may terminate the Agreement if Altimmune does not
deliver Voting Agreements from holders of at least 65% of the
outstanding shares of the Companys Class A Common Stock by 5:00
p.m. Eastern time on the Business Day after the date hereof.
The foregoing summary of the Merger Agreement does not purport to
be complete and is qualified in its entirety by reference to the
Merger Agreement, which is filed as Exhibit 2.1, and which is
incorporated herein by reference.
Voting Agreements.
Concurrently and in connection with the execution of the Merger
Agreement, certain of PharmAthenes stockholders, who beneficially
own approximately 4,861,743 of the outstanding shares of
PharmAthene common stock, entered into a voting agreement in
favor of Altimmune (the PharmAthene Voting Agreements), to which
such PharmAthene stockholders will agree to vote their shares of
PharmAthene common stock in favor of the adoption of the Merger
Agreement and against any amendment of PharmAthenes certificate
of incorporation or bylaws or any other proposal or transaction
involving PharmAthene, the effect of which amendment or other
proposal or transaction is to delay, impair, prevent or nullify
the Mergers or the transactions contemplated by the Merger
Agreement or change in any manner the voting rights of any
capital stock of PharmAthene. The Voting Agreements shall only be
effective upon the Effective Time and shall automatically
terminate in the event of the termination of the Merger Agreement
for any reason. The signatories thereto may not sell or transfer
their shares other than under specified circumstances to the
Voting Agreements.
The foregoing description of the Voting Agreements does not
purport to be complete and is qualified in its entirety by
reference to the form of Voting Agreement, which is filed as
Exhibit 10.1, and which is incorporated herein by reference.
Lock-Up Agreements
Concurrently and in connection with the execution of the Merger
Agreement, certain of the officers, directors and stockholders of
Altimmune, who in the aggregate held approximately 67.7% of the
outstanding shares of Altimmune capital stock as of January 17,
2017, entered into post-closing lock-up agreements with
PharmAthene (the Altimmune Lock-up Agreements). to the Altimmune
Lock-up Agreements, each such stockholder will be subject to
lock-up restrictions on the sale of PharmAthene common stock
acquired in the Mergers. Such restrictions will begin at the
Effective Time and end 180 days after the Effective Time.
Concurrently and in connection with the execution of the Merger
Agreement, certain of the officers, directors and stockholders of
PharmAthene, who in the aggregate beneficially held approximately
7.04% of the outstanding shares of PharmAthene capital stock as
of January 18, 2017, entered into post-closing lock-up agreements
(the PharmAthene Lock-up Agreements). to the PharmAthene Lock-up
Agreements, each such stockholder will be subject to lock-up
restrictions on the sale of PharmAthene common stock owned by
them. Such restrictions will begin at the Effective Time and end
180 days after the Effective Time.
The foregoing description of each of the Altimmune Lock-Up
Agreements and PharmAthene Lock-Up Agreements does not purport to
be complete and is qualified in its entirety by reference to the
forms of Lock-Up Agreements, which are filed as Exhibits 10.2 and
10.3, and which are incorporated herein by reference.
| Item 5.02. |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On January 14, 2017, PharmAthene entered into a retention and
severance agreement (the MacNeill Agreement) with Phillip
MacNeill, PharmAthenes Chief Financial Officer, which provides
for (i) a severance payment to Mr. MacNeill in the amount of
$93,094.61 if Mr. MacNeill remains employed with PharmAthene
through the closing of the Mergers and the preparation of
PharmAthenes 2016 annual report and proxy statement for the
PharmAthene 2017 annual meeting of stockholders and (ii) a bonus
payment to Mr. MacNeill in the amount of $67,235 if he remains
employed through the closing of the Mergers. Each payment will
become due and payable upon a termination by PharmAthene without
cause.
The foregoing summary of the MacNeill Agreement does not purport
to be complete and is qualified in its entirety by reference to
the MacNeill Agreement, which is filed as Exhibit 10.4, and which
is incorporated herein by reference.
| Item 5.03. |
Amendment to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
On and effective as of January 18, 2017, PharmAthenes board of
directors approved an amendment to the PharmAthene Bylaws (the
Bylaws), to implement a forum selection bylaw (the Bylaw
Amendment). The Bylaw Amendment provides that, unless PharmAthene
consents in writing to the selection of an alternative forum, the
Court of Chancery in the State of Delaware shall be the sole and
exclusive forum for (i) any derivative action or proceeding
brought on behalf of PharmAthene, (ii) any action asserting a
claim of breach of a fiduciary duty owed by any current or former
director, officer, stockholder, employee or agent of PharmAthene
to PharmAthene or PharmAthenes stockholders, (iii) any action
asserting a claim against PharmAthene or any current or former
director, officer, stockholder, employee or agent of PharmAthene
arising out of or relating to any provision of the General
Corporation Law of the State of Delaware or PharmAthenes Restated
Certificate of Incorporation or Bylaws or (iv) any action
asserting a claim against PharmAthene or any current or former
director, officer, stockholder, employee or agent of PharmAthene
governed by the internal affairs doctrine of the State of
Delaware.
The foregoing summary of the Bylaw Amendment does not purport to
be complete and is qualified in its entirety by reference to the
Bylaw Amendment, which is filed as Exhibit 3.1, and which is
incorporated herein by reference.
| Item 8.01. | Other Events. |
Attached hereto as Exhibit 99.1 is a joint press release of
PharmAthene and Altimmune, dated January 19, 2017.
| Item 9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits. |
| Exhibit No. | Description | |
| 2.1 |
Agreement and Plan of Merger and Reorganization dated as of January 18, 2017, by and among PharmAthene,Inc., Mustang Merger Sub, Inc., Mustang Merger Sub LLC, Altimmune, Inc. and Shareholder Representative Services LLC, as representative of Altimmune Securityholders * |
|
| 3.1 |
Amendment to the Bylaws of PharmAthene, effective as of January 18, 2017 |
|
| 10.1 |
Form of PharmAthene Voting Agreement dated as of January 18, 2017 |
|
| 10.2 |
Form of PharmAthene Lock-Up Agreement dated as of January 18, 2017 |
|
| 10.3 |
Form of Altimmune Lock-Up Agreement dated as of January 18, 2017 |
|
| 10.4 | Phillip MacNeill Retention and Severance Agreement | |
| 99.1 |
Joint News Release issued by PharmAthene and Altimmune on January 19, 2017 |
| * |
Exhibits and schedules to the Agreement and Plan of Merger and Reorganization have been omitted to Item 601(b)(2)of Regulation S-K. PharmAthene will furnish the omitted exhibits and schedules to the SEC upon request by the SEC. |
Important Additional Information about the Proposed
Mergers
This communication is being made in respect of the proposed
Mergers involving Altimmune, Inc. and PharmAthene, Inc.
PharmAthene intends to file a registration statement on Form S-4
with the U.S. Securities and Exchange Commission (the SEC), which
will contain a joint proxy statement/prospectus and other
relevant materials, and plans to file with the SEC other
documents regarding the proposed transaction. The final joint
proxy statement/prospectus will be sent to the stockholders of
PharmAthene and Altimmune in connection with the special meetings
of stockholders to be held to vote on matters relating to the
proposed transaction. The joint proxy statement/prospectus will
contain information about PharmAthene, Altimmune, the proposed
Mergers, and related matters. STOCKHOLDERS ARE URGED TO
READ THE JOINT PROXY STATEMENT/PROSPECTUS (INCLUDING ANY
AMENDMENTS OR SUPPLEMENTS THERETO) AND OTHER DOCUMENTS FILED WITH
THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE,
AS THEY WILL CONTAIN IMPORTANT INFORMATION THAT STOCKHOLDERS
SHOULD CONSIDER BEFORE MAKING A DECISION ABOUT THE MERGERS AND
RELATED MATTERS. In addition to receiving the joint
proxy statement/prospectus and proxy card by mail, stockholders
will also be able to obtain the joint proxy statement/prospectus,
as well as other filings containing information about
PharmAthene, without charge, from the SECs website
(http://www.sec.gov) or, without charge, by directing a written
request to: PharmAthene, Inc., One Park Place, Suite 450,
Annapolis, Maryland 21401, Attention: Investor Relations.
No Offer or Solicitation
This communication is not intended to and does not constitute an
offer to sell or the solicitation of an offer to subscribe for or
buy or an invitation to purchase or subscribe for any securities
or the solicitation of any vote or approval in any jurisdiction
in connection with the Mergers or otherwise, nor shall there be
any sale, issuance or transfer of securities in any jurisdiction
in contravention of applicable law. No offer of securities shall
be made except by means of a prospectus meeting the requirements
of Section 10 of the Securities Act of 1933, as amended.
Participants in Solicitation
PharmAthene and its executive officers and directors may be
deemed to be participants in the solicitation of proxies from
PharmAthenes stockholders with respect to the matters relating to
the proposed Mergers. Altimmune may also be deemed a participant
in such solicitation. Information regarding PharmAthenes
executive officers and directors is available in PharmAthenes
proxy statement on Schedule 14A, filed with the SEC on April 29,
2016. Information regarding any interest that PharmAthene,
Altimmune or any of the executive officers or directors of
PharmAthene or Altimmune may have in the transaction with
Altimmune will be set forth in the joint proxy
statement/prospectus that PharmAthene intends to file with the
SEC in connection with its stockholder vote on matters relating
to the proposed Mergers. Stockholders will be able to obtain this
information by reading the joint proxy statement/prospectus when
it becomes available.
Forward-Looking Statements
Except for the historical information presented herein, matters
discussed may constitute forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995
that are subject to certain risks and uncertainties that could
cause actual results to differ materially from any future
results, performance or achievements expressed or implied by such
statements. Statements that are not historical facts, including
statements preceded by, followed by, or that include the words
will; potential; believe; anticipate; intend; plan; expect;
estimate; could; may; should; or similar statements are
forward-looking statements. Such statements include, but are not
limited to those referring to the potential for growth and the
expected completion and outcome of the Mergers and the
transactions contemplated by the Merger Agreement and related
agreements. PharmAthene disclaims any intent or obligation to
update these forward-looking statements. Risks and uncertainties
include, among others, failure to obtain necessary stockholder
approval for the proposed Mergers with Altimmune and the matters
related thereto; failure of either party to meet the conditions
to closing of the transaction; delays in completing the
transaction and the risk that the transaction may not be
completed at all; failure to realize the anticipated benefits
from the transaction or delay in realization thereof; the
businesses of PharmAthene and Altimmune may not be combined
successfully, or such combination may take longer, be more
difficult, time-consuming or costly to accomplish than expected;
operating costs and business disruption during the pendency of
and following the transaction, including adverse effects on
employee retention and on business relationships with third
parties; the combined companys need for and ability to obtain
additional financing; risk associated with the reliability of the
results of the studies relating to human safety and possible
adverse effects resulting from the administration of the combined
companys product candidates; unexpected funding delays and/or
reductions or elimination of U.S. government funding for one or
more of the combined companys development programs; the award of
government contracts to competitors; unforeseen safety issues;
unexpected determinations that these product candidates prove not
to be effective and/or capable of being marketed as products; as
well as risks detailed from time to time in PharmAthenes Form
10-K under the caption Risk Factors and in its other reports
filed with the SEC. Copies of PharmAthenes public disclosure
filings are available from its investor relations department and
its website under the investor relations tab at
http://www.pharmathene.com.
About PHARMATHENE, INC. (NYSEMKT:PIP)
Pharmathene, Inc. (Pharmathene) is a biodefense company. The Company is focused on the development of medical counter measures against biological and chemical threats. The Company is involved in the development of two next generation anthrax vaccines. The Company’s anthrax vaccines use recombinant protective antigen (rPA) manufacturing processes. The Company’s product portfolio includes recombinant butyrylcholinesterase (rBChE) bioscavenger, which is used in prevention and treatment of nerve agent poisoning. The Company has developed a recombinant form of human butyrylcholinesterase for pre- and post-exposure therapy to patients with nerve agent attacks. Its rBChE bioscavenger acts with mechanism, which includes reversal of the acute toxicity associated with organophosphate poisoning agents used in chemical warfare (cholinergic crisis). Its development program also includes Valortim for monoclonal human antibody treatment. PHARMATHENE, INC. (NYSEMKT:PIP) Recent Trading Information
PHARMATHENE, INC. (NYSEMKT:PIP) closed its last trading session up +0.05 at 3.45 with 1,551,464 shares trading hands.