Sucampo Pharmaceuticals, Inc. (NASDAQ:SCMP) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01

On March 31, 2017, Sucampo Pharmaceuticals, Inc. (the
Registrant), entered into an Agreement
and Plan of Merger (the Merger
Agreement) with Vtesse Inc., a Delaware corporation
(Vtesse), Saber Merger Sub, Inc., a
Delaware corporation and wholly owned subsidiary of the
Registrant (Transitory Subsidiary), and
Fortis Advisors LLC, as representative of the holders of Vtesse
equity (the Company Equityholder
Representative). The Merger Agreement provides for
Transitory Subsidiary to merge with and into Vtesse (the
Merger), with Vtesse surviving as a
wholly owned subsidiary of the Registrant, subject to the terms
and conditions set forth in the Merger Agreement.

to the Merger Agreement, and upon the terms and subject to the
conditions thereof, at the closing, the Registrant is required to
pay holders of Vtesses capital stock and options to purchase
Vtesses common stock (collectively, the Company
Equityholders), upfront consideration equal to
approximately $200,000,000, consisting of, and subject to
adjustment with respect to, the following (A) an amount in cash
equal to (i) $170,000,000, plus (ii) all unrestricted cash and
cash equivalents held by Vtesse at Closing, plus (iii) a portion
of the aggregate exercise price of outstanding options (which
amount shall be subsequently deducted from the amounts otherwise
payable to the holders of such options), minus (iv) the amount by
which the Vtesse net working capital is less than zero, minus (v)
an amount set aside in escrow, minus (vi) the unpaid company
transaction expenses, minus (vii) an amount set aside for
expenses incurred by the Company Equityholder Representative and
minus (viii) an amount equal to any indebtedness of Vtesse at
closing, and (B) approximately 2,782,678 shares of Registrants
Class A Common Stock. The Company Equityholders receiving
Registrants Class A Common Stock are required to sign lock-up
agreements that, among other things, provide for a lock-up period
of three (3) months for all shares of Registrants Class A Common
Stock issued in the Merger.

The Registrant has also agreed to pay the Company Equityholders
(A) contingent consideration based on mid-single-digit to
double-digit royalties on global net sales of Vtesses VTS-270
product, tiered based on increasing net sales levels, and (B) a
share of net proceeds that may be generated from the monetization
of any priority review voucher that may be granted to Vtesse in
the future.

The Merger Agreement contains customary representations,
warranties, covenants and indemnities of each of the Registrant
and Vtesse. In addition, the Merger Agreement requires the
Registrant to register for resale, after the applicable lock-up
period, with the Securities and Exchange Commission all shares of
its Class A Common Stock issued as part of the consideration
payable in the Merger.

The foregoing summary is qualified in its entirety by reference
to the Merger Agreement, which will be filed as an exhibit to the
Registrants Quarterly Report on Form 10-Q for the quarter ended
March 31, 2017. The representations, warranties and covenants
contained in the Merger Agreement were made only for the purposes
of the Merger Agreement, were made as of specific dates, were
made solely for the benefit of the parties to the Merger
Agreement and may not have been intended to be statements of fact
but, rather, as a method of allocating risk and governing the
contractual rights and relationships among the parties to the
Merger Agreement. The assertions embodied in those
representations and warranties may be subject to important
qualifications and limitations agreed to by the Registrant and
Vtesse in connection with negotiating their respective terms.
Moreover, the representations and warranties may be subject to a
contractual standard of materiality that may be different from
what may be viewed as material to stockholders of the Registrant.
For the foregoing reasons, none of the Registrants stockholders
or any other person should rely on such representations and
warranties, or any characterizations thereof, as statements of
factual information at the time they were made or otherwise.

The Merger Agreement and the transactions contemplated in the
Merger Agreement have been unanimously approved by the
Registrants board of directors.

On April 3, 2017, the Registrant completed the Merger described
in Item 1.01 of this Current Report and paid all consideration
required to be paid at the closing to the Merger Agreements.

The information contained in Item 1.01 of this Current Report is
incorporated by reference into this Item 3.02. The Registrants
shares to be issued and sold to the Merger Agreement will be
issued and sold in reliance on an exemption provided by Section
4(a)(2) of the Securities Act of 1933, as amended.

On April 3, 2017, the Registrant issued a press release (the
Press Release) announcing the closing of the Merger. A copy of
the Press Release is included as Exhibit 99.1 hereto and is
incorporated by reference.

In addition, the Company will be providing supplemental
information regarding the Merger in connection with a
presentation to investors on April 3, 2017. The slides to be used
in connection with this investor presentation are included as
Exhibit 99.2 hereto and are incorporated herein by reference.

The foregoing information in this Item 7.01, including Exhibits
99.1 and 99.2 hereto, shall not be deemed filed for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended
(the Exchange Act), or otherwise
subject to the liability of that section, nor shall it be deemed
incorporated by reference in any of the Registrant’s filings
under the Securities Act of 1933, as amended, or the Exchange
Act, whether made before or after the date hereof, regardless of
any incorporation language in such a filing, except as expressly
set forth by specific reference in such a filing.

(d)Exhibits

About Sucampo Pharmaceuticals, Inc. (NASDAQ:SCMP)

Sucampo Pharmaceuticals, Inc. is a biopharmaceutical company. The Company focuses on research and development of drugs to treat gastrointestinal, ophthalmic and oncology-based inflammatory disorders. It operates through development and commercialization of pharmaceutical products segment. Its operations are conducted through Sucampo AG, based in Zug, Switzerland, through which the Company conducts certain worldwide and European operations; Sucampo Pharma, LLC, based in Tokyo and Osaka, Japan and R-Tech Ueno, Ltd., based in Kobe, Japan, through which the Company conducts its Asian operations; Sucampo Pharma Americas LLC, based in Rockville, Maryland, through which the Company conducts operations in North and South America, and Sucampo Pharma Europe, Ltd., based in Oxford, the United Kingdom. It offers AMITIZA for the treatment of constipation and RESCULA for the lowering of intraocular pressure (IOP). Its products under development include cobiprostone, RTU-1096 and RTU-009.

Sucampo Pharmaceuticals, Inc. (NASDAQ:SCMP) Recent Trading Information

Sucampo Pharmaceuticals, Inc. (NASDAQ:SCMP) closed its last trading session down -0.10 at 11.00 with 441,392 shares trading hands.