TALPHERA, INC. Item 1.01. Entry into a Material Definitive Agreement.
The disclosure contained in Items 2.01 and 8.01 below is incorporated herein by reference.
On
Pursuant to the Merger Agreement, on
? a one-time payment of$3.0 million upon the approval of NIYAD™, which may be via a pre-market approval application filed with the FDA ("PMA") or new drug application filed via any route ("NDA"), with a label indication for use for patients in the in-patient setting for continuous renal replacement therapy; ? a one-time payment of$2.0 million upon obtaining (i) the approval from the FDA, via a PMA or NDA, for NIYAD with a label indication for use for patients undergoing intermittent hemodialysis in the outpatient setting and (ii) the receipt of approval from theCenters for Medicare and Medicaid Studies ("CMS") of NIYAD to be included in the End-Stage Renal Dialysis Prospective Payment System, as a qualified device under the Transitional Add-on Payment Adjustment for New and Innovative Equipment and Supplies, if approved by the FDA as a device, or the Transitional Drug Add-on Payment Adjustment, if approved by the FDA as a drug; ? a one-time payment of$2.0 million upon the approval of LTX-608 with a label indication for use for patients with Acute Respiratory Distress Syndrome, Disseminated Intravascular Coagulation, or as an antiviral; ? a one-time payment of$2.0 million upon obtaining ownership of an issued patent inthe United States that covers LTX-608, whereby the corresponding patent information is also published in the Orange Book prior to losing exclusivity; ? a one-time payment of$3.5 million upon the achievement of at least$12,000,000 in aggregate net sales of NIYAD and LTX-608 during any calendar year ending on or beforeDecember 31, 2026 ; ? a one-time payment of$3.5 million upon the achievement of at least$25,000,000 in aggregate net sales of NIYAD and LTX-608 during any calendar year ending on or beforeDecember 31, 2027 ; and ? a one-time payment of$10.0 million upon the achievement of at least$100,000,000 in aggregate net sales of NIYAD and LTX-608 during any calendar year ending on or beforeDecember 31, 2030 .
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The terms of the CVRs described above reflect the parties' agreement over the sharing of potential economic upside benefits from future regulatory milestones and revenues of product candidates and do not necessarily reflect anticipated regulatory milestones or sales of such candidates. There can be no assurance that such regulatory milestones or levels of net sales will occur or that any or all of the payments in respect of the CVRs will be made.
AcelRx may elect to pay such contingent consideration in AcelRx common stock or cash, provided however that, absent stockholder approval, the total number of shares of AcelRx common stock issuable as merger consideration in the Mergers, including the CVRs, will not exceed 19.9% of the total number of shares of AcelRx common stock that were issued and outstanding immediately prior to the closing of the First Merger. AcelRx shall use reasonable efforts to issue shares rather than cash for any payable up to an amount equal to the 19.9% threshold. AcelRx will have the ability to pay cash in lieu of shares of AcelRx common stock for any shares exceeding the 19.9% threshold.
The right to such contingent consideration as evidenced by the CVR Agreement is
a contractual right only and will not be transferable, except in the limited
circumstances specified in the CVR Agreement, are not certificated or evidenced
by any instrument and are not registered with the
Item 2.01. Completion of Acquisition or Disposition of Assets.
The disclosure contained in Item 1.01 above and in Items 3.02 and 8.01 below is incorporated herein by reference.
On
Pursuant to the terms of the Merger Agreement, at the Closing of the Mergers,
all options to purchase capital stock and all shares of Lowell capital stock
issued and outstanding immediately before the effective time of the First Merger
were cancelled in exchange for the right to receive (i) 9,009,538 shares of
AcelRx common stock and cash in the amount of
The shares issued pursuant to the Merger Agreement were issued in private placements pursuant to the exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act"), including Rule 506 of Regulation D promulgated under the Securities Act ("Regulation D") without general solicitation as a transaction not involving any public offering.
Item 3.02. Unregistered Sales of
The disclosure contained in Items 1.01 and 2.01 above and in Item 8.01 below is incorporated herein by reference.
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Pursuant to the terms of the Merger Agreement, at the Closing, all options to
purchase capital stock and all shares of Lowell capital stock issued and
outstanding immediately before the effective time of the First Merger were
cancelled in exchange for the right to receive (i) 9,009,538 shares of AcelRx
common stock and cash in the amount of
Potential Future Consideration
The actual number of shares that will be issued under the Merger Agreement and CVR Agreement pursuant to certain milestone and indemnification provisions, as applicable, will depend on (i) the extent of fulfillment of the applicable milestone targets, (ii) the share issuance price at the time of any such payment, and (iii) whether there are any offsetting indemnification claims or other applicable offsets. AcelRx may elect to pay the contingent consideration under the CVR Agreement in AcelRx common stock or cash, provided however that, absent stockholder approval, the total number of shares of AcelRx common stock issuable as merger consideration in the Mergers, including the CVRs, will not exceed 19.9% of the total number of shares of AcelRx common stock that were issued and outstanding immediately prior to the closing of the First Merger. AcelRx shall use reasonable efforts to issue shares rather than cash for any payable up to an amount equal to the 19.9% threshold. AcelRx will have the ability to pay cash payable in lieu of shares of AcelRx common stock for any shares exceeding the 19.9% threshold.
The shares issued pursuant to the Merger Agreement were issued in private placements pursuant to the exemption from registration under Section 4(a)(2) of the Securities Act, including Rule 506 of Regulation D without general solicitation as a transaction not involving any public offering.
The shares issued to the Lowell stockholders and option holders in connection with the Closing are restricted securities for purposes of Rule 144 under the Securities Act and are subject to certain requirements restricting their resale, including certain holding period requirements. AcelRx did not engage in a general solicitation or advertising with regard to the issuance and sale of the shares of AcelRx that were issued in connection with the Closing. All book-entries representing the shares issued will be accompanied by a legend stating that the shares have not been registered under the Securities Act and cannot be transferred until properly registered under the Securities Act or an exemption applies.
The foregoing summary of the Merger Agreement and the CVR Agreement does not
purport to be complete and is qualified in its entirety by reference to (i) the
Merger Agreement, a copy of which was filed as Exhibit 2.1 to the Company's
Quarterly Report on Form 10-Q for the quarter ending
Item 8.01. Other Events.
The Company issued a press release on
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Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements, including,
but not limited to, statements related to regulatory milestones or levels of net
sales, payments in respect of the CVRs (including the form of such payments),
limiting the number of shares of AcelRx common stock issuable as merger
consideration in the Mergers, including the CVRs, to the 19.9% threshold, and
using reasonable efforts to issue shares rather than cash for any payable up to
an amount equal to the 19.9% threshold. These and any other forward-looking
statements are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. These statements may be identified by
the use of forward-looking terminology such as "believes," "expects,"
"anticipates," "may," "will," "should," "seeks," "approximately," "intends,"
"plans," "estimates," "could," or the negative of these words or other
comparable terminology. The discussion of financial trends, strategy, plans or
intentions may also include forward-looking statements, which are predictions,
projections and other statements about future events that are based on current
expectations and assumptions. These forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially from those
projected, anticipated or implied by such statements, including: (i) the
occurrence of any event, change or other circumstance that could change the
expected benefits of the acquisition; (ii) risks that the acquisition disrupts
the current plans and operations of AcelRx; (iii) risks relating to diverting
AcelRx management's attention from ongoing business operations; (iv) the ability
of AcelRx to implement its plans, forecasts and other expectations with respect
to its newly acquired product candidates and realize additional opportunities
for growth and innovation; (v) the ability to achieve the expected benefits from
the acquisition; (vi) the impacts of any breaches of representations and
warranties contained in the Merger Agreement and whether adequate remedies exist
therefor; and (vii) unexpected variations in market growth and demand for
AcelRx's products and technologies. Although it is not possible to predict or
identify all such risks and uncertainties, they may include, but are not limited
to, those described under the caption "Risk Factors" and elsewhere in AcelRx's
annual, quarterly and current reports (i.e., Form 10-K, Form 10-Q and Form 8-K)
as filed or furnished with the
Item 9.01 Financial Statements and Exhibits
Exhibit No. Description 10.1 Contingent Value Rights Agreement, dated as ofJanuary 7, 2022 , by and amongAcelRx Pharmaceuticals, Inc. ,James Wilkie , solely in his capacity as the representative of the Lowell stockholders and option holders, andComputershare Inc. , and its wholly-owned subsidiary,Computershare Trust Company, N.A. , a federally chartered trust company, collectively as Rights Agent 99.1 Press Release 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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