GridAI Technologies Corp DEFA14A, filed May 30, 2024
GridAI Technologies Corp. (GRDX)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K/A
(Amendment No. 2)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): March 13, 2024
| Entero Therapeutics, Inc. | ||
| (Exact name of registrant as specified in its charter) |
| Delaware | 001-37853 | 46-4993860 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
|
777 Yamato Road, Suite 502 Boca Raton, Florida |
33431 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (561) 589-7020
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| x | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) |
Name of each exchange on which | ||
| Common Stock, par value $0.0001 per share | ENTO | The Nasdaq Capital Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
INTRODUCTORY NOTE
On March 14, 2024, Entero Therapeutics, Inc., a Delaware corporation (the “Company”), formerly known as First Wave BioPharma, Inc. (prior to the Company’s corporate name change which became effective on May 17, 2024), filed a Current Report on Form 8-K (the “Original Report”) with the Securities and Exchange Commission (the “SEC”) to report the Company’s previously announced merger with ImmunogenX, Inc., a Delaware corporation (“IMGX”), pursuant to that certain Agreement and Plan of Merger, dated March 13, 2024, by and among the Company, IMMUNO Merger Sub I, Inc., a Delaware corporation, IMMUNO Merger Sub II, LLC, a Delaware limited liability company, and IMGX (collectively, the “Merger”).
On May 8, 2024, the Company filed Amendment No. 1 to Current Report on Form 8-K/A (the “First Amendment”) amending the Original Report to include the financial statements and the pro forma financial information required under Items 9.01(a) and 9.01(b), which were excluded from the Original Report in reliance on the instructions to such Items.
This Amendment No. 2 to Current Report on Form 8-K/A (the “Second Amendment”) amends and supplements the First Amendment to include certain additional pro forma financial information required under Item 9.01(b) in connection with the Merger, as set forth below. The Original Report otherwise remains the same, as amended and supplemented by the First Amendment, and the Items therein, including Item 9.01, and are hereby incorporated by reference into this Second Amendment.
| Item 9.01 | Financial Statements and Exhibits. |
(b) Pro forma Financial Information
The unaudited pro forma combined statements of operations as of March 31, 2024 that give effect to the Merger are attached hereto as Exhibit 99.3, and are incorporated herein by reference.
(d) Exhibits
* Filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ENTERO THERAPEUTICS, Inc. | ||
| Date: May 30, 2024 | By: | /s/ Sarah Romano |
| Sarah Romano | ||
| Chief Financial Officer | ||
Exhibit 99.3
Unaudited Pro Forma Condensed Combined Statement of Operations
The following unaudited pro forma combined financial information has been prepared in accordance with Article 11 of Regulation S-X under the Securities Act of 1933, as amended (the “Securities Act”) and presents the combined historical results of operations of Entero Therapeutics, Inc. (formerly known as First Wave BioPharma, Inc., “Entero” or the “Company”) and the historical results of operations of ImmunogenX, Inc. (“ImmunogenX”), adjusted to give effect to (i) the March 13, 2024 (“Closing Date”) acquisition of ImmunogenX as further described below (the “Transaction”) and (ii) the pro forma effects of certain assumptions and adjustments described in “Notes to the Pro Forma Combined Financial Information” below.
The following unaudited pro forma combined financial information is presented to illustrate the estimated effects of the Transaction, based on the historical financial statements and accounting records of Entero and ImmunogenX after giving effect to these transactions and the related pro forma adjustments as described in the notes included below.
The unaudited pro forma combined statement of operations for the three-months ended March 31, 2024, combines the historical statements of operations of Entero and ImmunogenX, giving effect to the Transaction as if it had occurred on January 1, 2024.
Entero was preliminarily determined to be the accounting acquirer based upon the terms of the Transaction and other factors including Entero’s security holders retaining voting control. The historical financial statements of Entero and ImmunogenX have been adjusted to give pro forma effect to events that are (1) directly attributable to the Transaction, (2) factually supportable, and (3) with respect to the unaudited pro forma combined statements of operations, expected to have a continuing impact on the combined results of operations of the combined company. The unaudited pro forma combined financial statements should be read in conjunction with the accompanying notes to the unaudited pro forma combined financial statements.
The unaudited pro forma combined financial information, including the notes thereto, should be read in conjunction with the separate Entero and ImmunogenX historical financial statements referenced or included as exhibits to Form 8-K/A issued on May 8, 2024.
These unaudited pro forma combined financial statements are for informational purposes only. They do not purport to indicate the results that would have been obtained had the Business Combination and related transactions actually been completed on the assumed date or for the period presented, or which may be realized in the future. The pro forma adjustments are based on the information currently available and the assumptions and estimates underlying the pro forma adjustments are described in the accompanying notes. Actual results may differ materially from the assumptions within the accompanying unaudited pro forma condensed consolidated combined financial information.
Description of the Business Combination
On March 13, 2024, Entero acquired ImmunogenX in accordance with the terms of an Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company, IMMUNO Merger Sub I, Inc., a Delaware corporation (“First Merger Sub”), IMMUNO Merger Sub II, LLC, a Delaware limited liability company (“Second Merger Sub”), and ImmunogenX. Pursuant to the Merger Agreement, First Merger Sub merged with and into ImmunogenX, pursuant to which ImmunogenX was the surviving corporation (the “First Merger”). Immediately following the First Merger, ImmunogenX merged with and into Second Merger Sub, pursuant to which Second Merger Sub was the surviving entity and a wholly owned subsidiary of the Company (the “Second Merger” and together with the First Merger, the “Merger”). The Merger is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes.
Under the terms of the Merger Agreement, upon the consummation of the Merger on March 13, 2024 (the “Closing”), in exchange for the outstanding shares of capital stock of ImmunogenX immediately prior to the effective time of the First Merger, the Company issued to the stockholders of ImmunogenX an aggregate of (A) 36,830 shares of common stock of the Company, par value $0.0001 per share (the “Common Stock”), and (B) 11,777.418 shares of Series G Preferred Stock (as defined and described below), each share of which is convertible into 1,000 shares of Common Stock, subject to certain conditions described below. In addition, the Company assumed (i) all ImmunogenX stock options immediately outstanding prior to the First Merger, each becoming an option to purchase Common Stock subject to adjustment pursuant to the terms of the Merger Agreement (the “Assumed Options”) and (ii) all ImmunogenX warrants immediately outstanding prior to the First Merger, each becoming a warrant to purchase Common Stock subject to adjustment pursuant to the terms of the Merger Agreement (the “Assumed Warrants”). The Assumed Options are exercisable for an aggregate of 200,652 shares of Common Stock, have an exercise price of $0.81 and expire between February 1, 2031 and June 6, 2033. The Assumed Warrants are exercisable for and aggregate of 127,680 shares of Common Stock, have exercise prices ranging from $3.02 to $3.92 and expire between September 30, 2032 and September 6, 2033.
Pursuant to the Merger Agreement, the Company has agreed to hold a stockholders’ meeting to submit the following matters to its stockholders for their consideration: (i) the approval of the conversion of shares of Series G Preferred Stock into shares of Common Stock in accordance with the rules of the Nasdaq Stock Market LLC (the “Conversion Proposal”) and (ii) if deemed necessary or appropriate by the Company or as otherwise required by applicable law or contract, the approval of an amendment to the Company’s certificate of incorporation, as amended (the “Charter”), to authorize sufficient shares of Common Stock for the conversion of Series G Preferred Stock issued pursuant to the Merger Agreement (the “Share Increase Proposal” and together with the Conversion Proposal, the “Meeting Proposals”).
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE THREE-MONTHS ENDED MARCH 31, 2024
| Entero formerly known as First Wave BioPharma, Inc. | ImmunogenX 1/1/24 - 3/13/24 | Transaction Accounting Adjustments | Notes | Pro Forma Combined | ||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| General and administrative | $ | 8,659,692 | $ | 943,828 | $ | — | $ | 9,603,520 | ||||||||||||
| Research and development | 565,962 | 669,624 | — | 1,235,586 | ||||||||||||||||
| Total operating expenses | 9,225,654 | 1,613,452 | — | 10,839,106 | ||||||||||||||||
| Other income (expense): | ||||||||||||||||||||
| Interest expense | (66,202 | ) | (690,634 | ) | — | (756,836 | ) | |||||||||||||
| Interest income | 228 | — | — | 228 | ||||||||||||||||
| Other income, net | — | 617,397 | — | 617,397 | ||||||||||||||||
| Other expense | (653 | ) | — | (21,667 | ) | A | (22,320 | ) | ||||||||||||
| Change in fair value of convertible notes | — | (5,687,225 | ) | — | (5,687,225 | ) | ||||||||||||||
| Total other expense, net | (66,627 | ) | (5,760,462 | ) | (21,667 | ) | (5,848,756 | ) | ||||||||||||
| Loss before benefit for income taxes | (9,292,281 | ) | (7,373,914 | ) | (21,667 | ) | (16,687,862 | ) | ||||||||||||
| Benefit for state income taxes | 14,859,887 | — | — | 14,859,887 | ||||||||||||||||
| Net income (loss) | 5,567,606 | (7,373,914 | ) | (21,667 | ) | (1,827,975 | ) | |||||||||||||
| Preferred stock dividends | (66,144 | ) | — | — | (66,144 | ) | ||||||||||||||
| Net income (loss) applicable to common shareholders | $ | 5,501,462 | $ | (7,373,914 | ) | $ | (21,667 | ) | $ | (1,894,119 | ) | |||||||||
| Basic weighted average shares outstanding | 1,761,953 | 1,921,897 | 1,761,953 | |||||||||||||||||
| Diluted weighted average shares outstanding | 14,511,461 | 1,921,897 | B | 1,761,953 | ||||||||||||||||
| Income (loss) per share - basic | $ | 3.12 | $ | (3.84 | ) | $ | (1.08 | ) | ||||||||||||
| Income (loss) per share - diluted | $ | 0.38 | $ | (3.84 | ) | $ | (1.08 | ) | ||||||||||||
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
Note 1. Basis of Presentation
Entero’s unaudited historical financial information has been derived from its Quarterly Report on Form 10-Q for the three-months ended March 31, 2024. Such unaudited historical financial information includes the results of ImmunogenX operations from the acquisition date of March 13, 2024 through March 31, 2024. ImmunogenX results for the period from January 1, 2024 through March 13, 2024 were based on the unaudited historical statement of operations for that period. Pro forma adjustments have been made to reflect the Transaction and certain transaction accounting adjustments, as discussed further in Note 2—Pro Forma Adjustments and Assumptions. The pro forma statement for the three-months ended March 31, 2024 gives pro forma effect to the Transaction as if it had occurred on January 1, 2024, the beginning of the earliest period presented.
The unaudited pro forma combined financial information was prepared using the acquisition method of accounting and is based on the historical financial statements of Entero and ImmunogenX. The acquisition method of accounting is based on Accounting Standards Codification (“ASC”) 805, Business Combinations, with the Company as the accounting acquirer, and uses the fair value concepts defined in ASC 820, Fair Value Measurement. For additional information about the Transaction and the accounting methodology used, refer to the Current Report on Form 8-K/A issued on May 8, 2024.
In the opinion of management, all material adjustments have been made that are necessary to present fairly, in accordance with Article 11 of Regulation S-X, the pro forma financial statement. The pro forma financial statement is provided for illustrative purposes only and does not purport to be indicative of what Entero’s actual results of operations would have been on a consolidated basis if the Transaction had occurred on the dates indicated, nor is it indicative of the future results of operations or financial position.
The pro forma basic and diluted earnings per share amounts presented in the unaudited pro forma statement are based on the weighted average number of Entero’s common shares outstanding, assuming the Transaction occurred on January 1, 2024.
Note 2. Pro Forma Adjustments
The unaudited pro forma combined financial information includes pro forma adjustments that are (1) directly attributable to the Transaction (2) factually supportable, and (3) with respect to the unaudited pro forma combined statements of operations, expected to have a continuing impact on the results of operations of the combined company.
The pro forma adjustments reflecting the completion of the transaction are based upon the accounting analysis conclusion that the Transaction should be accounted for under the acquisition method of accounting and upon the assumptions set forth below.
The pro forma adjustments, based on preliminary estimates that may change significantly as additional information is obtained, are as follows:
| A. | Reflects amortization expense for patents and trade names/trademarks with useful lives of two and six years, respectively. |
| B. | Anti-dilutive common share equivalents excluded from the computation of diluted net loss per share at March 31, 2024 consisted of 118,084 warrants, 169,536 stock options, 88,523 restricted stock units, 12,373 Series G Convertible Preferred shares convertible into 12,373,226 common shares, and 139 Series B Convertible Preferred shares. |