ANCHIANO THERAPEUTICS LTD. Item 1.01 Entry into a Material Definitive Agreement.
Merger Agreement and Transaction
On
At the effective time of the Merger (the "Effective Time"): (a) each Chemomab ordinary share outstanding immediately prior to the Effective Time (excluding shares held by Merger Sub or Chemomab) will be converted solely into the right to receive a number of American Depositary Shares (the "ADSs"), representing ordinary shares of the Company, equal to the exchange ratio described in the Merger Agreement, and each outstanding Chemomab option will be assumed by the Company, based on the same exchange ratio. Under the exchange ratio formula in the Merger Agreement, following the closing of the Merger (the "Closing"), the former Chemomab securityholders immediately before the Merger are expected to own approximately 90% of the aggregate number of the outstanding securities of the Company, and the securityholders of the Company immediately before the Merger are expected to own approximately 10% of the aggregate number of the outstanding securities of the Company, subject to certain assumptions (on a fully diluted basis) and subject to adjustment pre-closing of the Merger (the "Closing") based on the Company's net cash balance at the time of the Closing. The Closing is conditioned on completion of a Closing Financing (as defined below), which will dilute securityholders of both the Company and Chemomab on a pro-rata basis.
Following the Closing, Dr.
The Merger Agreement contains customary representations, warranties and covenants made by the Company and Chemomab, including covenants relating to obtaining the requisite approvals of the shareholders of the Company and Chemomab, indemnification of directors and officers, and the Company's and Chemomab's conduct of their respective businesses between the date of signing of the Merger Agreement and the Closing.
In connection with the Merger, the Company will prepare and file a proxy statement and seek the approval of the Company's shareholders with respect to certain actions, including the following:
· the change of control of the Company resulting from the Merger, pursuant to
Nasdaq rules;
· the issuance of the Company's Ordinary Shares, represented by ADSs in an
unregistered offering, pursuant to the Nasdaq rules;
· the adoption of the amended and restated Articles of Association of the
Company, effective upon the Merger, which will, among other things: (i) change the name of the Company toChemomab Therapeutics Ltd. or such other name as may be approved by Chemomab and the Israeli Companies Registrar, and (ii) amend the manner in which the Company's directors are elected to a classified board format; and
· the adoption of the of the form of Indemnification Agreement to be entered into
by each member of the Company's Board of Directors and officers from time to time (post-Closing).
The Closing is subject to satisfaction or waiver of certain conditions including, among other things, (i) the required approvals by the parties' shareholders, (ii) the accuracy of the representations and warranties, subject to certain materiality qualifications, (iii) compliance by the parties with their respective covenants, (iv) no law or order preventing the Merger and related transactions, (v) the share purchase agreement in respect of the Closing Financing being in full force and effect and the minimum cash proceeds for that financing (as described below) having been received by the Company concurrently with the Closing, (vi) the listing of the ADSs on Nasdaq, (vii) entry by certain shareholders of the Company and Chemomab into Lock-Up Agreements and the Support Agreements (each as defined below) and (viii) certain minimum requirements of net cash (as defined in the Merger Agreement) held by the Company at the time of Closing. The Merger will not be subject to antitrust approval.
The Merger Agreement also includes termination provisions for both the Company and Chemomab.
The ADSs to be issued in the Merger will be offered and sold in reliance on an exemption from registration under Regulation D promulgated under Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act"). Appropriate restrictive legends will be affixed to the ADSs. At the Closing, certain shareholders of Chemomab will enter into a Registration Rights Agreement with the Company, providing for the registration by the Company of the resale of ADSs by those shareholders under certain terms and conditions following the 180 day lock-up period under the Lock-Up Agreement (for those shareholders for which the ADSs will not otherwise be freely tradeable as of the end of the lock-up period).
The Merger Agreement contemplates an investment of at least
This report does not constitute an offer to sell or the solicitation of an offer to buy any security, nor shall there be any sale of the securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful.
The Merger Agreement is attached hereto as Exhibit 2.1.
Shareholder Support Agreements
Shareholders of both companies holding shares sufficient to approve the Merger have entered into shareholder support agreements with the respective companies in support of the Merger.
In connection with the execution of the Merger Agreement, shareholders of the Company entered into support agreements with Chemomab relating to the Merger covering approximately 57% of the outstanding Ordinary Shares of the Company, as of immediately prior to the Merger (the "Company Shareholder Support Agreements"). The Company Shareholder Support Agreements provide, among other things, that the shareholders party to the Company Shareholder Support Agreements will vote all of the shares (including shares represented by ADSs) held by them in favor of the issuance of the ADSs in connection with the Merger and the other transactions contemplated by the Merger Agreement.
In connection with the execution of the Merger Agreement, certain shareholders of Chemomab entered into support agreements with the Company covering approximately 83% of the outstanding shares of Chemomab relating to the Merger (the "Chemomab Shareholder Support Agreements," and together with the Company Shareholder Support Agreements, the "Shareholder Support Agreements"). The Chemomab Shareholder Support Agreements provide, among other things, that the shareholders party to the Chemomab Shareholder Support Agreements will vote all of the shares of Chemomab held by them in favor of the adoption of the Merger Agreement, the approval of the Merger and the other transactions contemplated by the Merger Agreement.
A form of Company Shareholder Support Agreement is attached hereto as Exhibit 10.1 and a form of Chemomab Shareholder Support Agreement is attached hereto as Exhibit 10.2.
Lock-Up Agreements
Concurrently with the execution of the Merger Agreement, certain shareholders of the Company and Chemomab entered into lock-up agreements (the "Lock-Up Agreements"), pursuant to which they accepted certain restrictions on transfers of shares of the Company held, or to be held, by them (including shares represented by ADSs) for the 180-day period following the Effective Time.
A form of Lock-Up Agreement is attached hereto as Exhibit 10.3.
Chemomab Warrant
In connection with the Closing, shareholders of Chemomab will be issued a warrant (the "Chemomab Warrant") that is exercisable for ADSs, pro rata based on the Chemomab shareholders' respective holdings at the Closing. The Chemomab Warrant is exercisable if (i) a claim is filed within one year after the Closing for contingent liabilities of the Company related to the pre-Closing period, and (ii) if a judgment or settlement is paid within five years after the Closing in connection with such claims. The maximum number of shares (represented by ADSs) . . .
Item 8.01 Other Events. Press Release
On
Forward Looking Statements
This report contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements include, among other things, statements regarding the structure, timing and completion of the proposed merger; the combined company's listing on Nasdaq upon the Closing; the financial position and cash balance of the combined company; expectations regarding ownership structure of the combined company; the future operations of the combined company and its ability to successfully initiate and complete clinical trials and achieve regulatory milestones; the nature, strategy and focus of the combined company; the development and commercial potential and potential benefits of any product candidates of the combined company; that the proposed merger will close and will enable the combined company to participate in the possible success of the combined company's product candidates; that the product candidates have the potential to address high unmet needs of patients with serious fibrosis-related diseases and conditions; and the executive and board structure of the combined company. Any statements contained in this communication that are not statements of historical fact may be deemed to be forward-looking statements. These forward-looking statements are based upon the Company's current expectations. Forward-looking statements involve risks and uncertainties.
Because such statements deal with future events and are based on the Company's
current expectations, they are subject to various risks and uncertainties and
actual results, performance or achievements of the Company or the combined
company could differ materially from those described in or implied by the
statements in this report, including: the risk related to the Company's ability
to complete the merger on the proposed terms and schedule, including risks and
uncertainties related to the satisfaction of the closing conditions related to
the merger agreement and risks and uncertainties related to the failure to
timely or at all obtain shareholder approval for the transaction; the execution
of definitive agreements with certain existing Chemomab shareholders including
risks and uncertainties related to the satisfaction of the closing conditions
related to the financing; risks related to the combined company's ability to
correctly manage its operating expenses and its expenses; risks related to the
market price of the Company's ADSs relative to the exchange ratio; unexpected
costs, charges or expenses resulting from the transaction; potential adverse
reactions or changes to business relationships resulting from the announcement
or completion of the proposed merger transaction; combined company's plans to
develop and commercialize its product candidates, including CM-101 and RAS; the
timing of initiation of combined company's planned clinical trials; the timing
of the availability of data from combined company's clinical trials; the timing
of any planned investigational new drug application or new drug application;
combined company's plans to research, develop and commercialize its current and
future product candidates; the clinical utility, potential benefits and market
acceptance of combined company's product candidates; combined company's
commercialization, marketing and manufacturing capabilities and strategy; the
combined company's ability to protect its intellectual property position; and
the requirement for additional capital to continue to advance these product
candidates, which may not be available on favorable terms or at all. In
addition, there can be no assurance that the Company will be able to complete
the transactions contemplated by the merger agreement or related transactions.
Additional risks and uncertainties relating to the Company and its business can
be found under the caption "Risk Factors" and elsewhere in the Company's filings
and reports with the
Additional Information and Where You Can Find It
The Merger Agreement, the Support Agreements, the Lock-Up Agreements, the Chemomab Warrant and the Shavit Waiver (the "Transaction Agreements"), and the foregoing description of the Transaction Agreements, have been included to provide investors and shareholders with information regarding the terms of the Transaction Agreements.
The assertions embodied in the representations and warranties contained in the
Merger Agreement are qualified by information in confidential disclosure
schedules delivered by each of the Company and Chemomab to the other party,
respectively, in connection with the signing of the Merger Agreement. Moreover,
certain representations and warranties in the Merger Agreement were made as of a
specified date, may be subject to a contractual standard of materiality
different from what might be viewed as material to shareholders, or may have
been used for the purpose of allocating risk between the parties to the Merger
Agreement. Accordingly, the representations and warranties in the Merger
Agreement should not be relied on by any persons as characterizations of the
actual state of facts and circumstances of the Company at the time they were
made and should be considered in light of the entirety of the factual disclosure
about the Company in the Company's public reports filed with the
In connection with the proposed transactions between the Company and Chemomab,
the Company will file a proxy statement with the
You may obtain free copies of the proxy statement and all other documents filed
or that will be filed with the
Participants in Solicitation
The Company, Chemomab and their respective directors and executive officers may
be deemed to be participants in the solicitation of proxies from the holders of
the Company's ordinary shares in connection with the proposed transaction.
Information about the Company's directors and executive officers is set forth in
the Company's Definitive Proxy Statement for its 2020 annual meeting of
shareholders, which was filed with the
Non-Solicitation
This report will not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor will there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits Exhibit No. Description 2.1* Agreement and Plan of Merger, datedDecember 14, 2020 , by and amongAnchiano Therapeutics Ltd. ,Chemomab Ltd. andCMB Acquisition Ltd. . 10.1 Form of Company Shareholder Support Agreement, datedDecember 14, 2020 , by and betweenChemomab Ltd. and each of the parties named in each agreement thereof. 10.2 Form of Chemomab Shareholder Support Agreement, datedDecember 14, 2020 , by and betweenAnchiano Therapeutics Ltd. and each of the parties named in each agreement thereof. 10.3 Form of Lock-Up Agreement, datedDecember 14, 2020 , by each of the parties named in each agreement thereof. 10.4 Chemomab Warrant, datedDecember 14, 2020 , by and amongAnchiano Therapeutics Ltd. and the shareholders of Chemomab. 10.5 Cashless Exercise Notice, Amendment, Waiver, Release and Termination, datedDecember 14, 2020 , by and amongAnchiano Therapeutics Ltd. ,Shavit Capital Fund III (US), L.P. ,Shavit Capital Fund IV (US), L.P. ,Shavit Capital Fund 3 (Israel ), L.P. ,Shavit Capital Fund 4 (Israel ), L.P. , Clal Biotechnology Industries Ltd. and other investors. 99.1 Joint Press Release ofAnchiano Therapeutics Ltd. andChemomab Ltd. , datedDecember 15, 2020 . * Certain schedules and exhibits to this exhibit have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to theSEC upon request.
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