Item 1.01 Entry into a Material Definitive Agreement.
Agreement and Plan of Merger
On
June 30, 2017, Opexa Therapeutics, Inc., a Texas corporation (“
Opexa
”), Opexa Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Opexa (“
Merger Sub
”), and Acer Therapeutics Inc., a
Delaware corporation (“
Acer
”), entered into an Agreement and Plan of Merger and Reorganization (the “
Merger Agreement
”), pursuant to which, among other things, subject to the satisfaction or waiver of the conditions
set forth in the Merger Agreement, Merger Sub will merge with and into Acer, with Acer becoming a wholly-owned subsidiary of Opexa and the surviving corporation of the merger (the “
Merger
”). The Merger is intended to qualify for
federal income tax purposes as a
tax-free
reorganization under the provisions of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “
Internal Revenue Code
”).
Subject to the terms and conditions of the Merger Agreement, at the closing of the Merger, each outstanding share of Acer common stock will be
converted into the right to receive approximately one share of common stock of Opexa, which amount is subject to adjustment prior to closing of the Merger upon the occurrence of specified events, including to account for any additional shares that
Acer may issue before closing and for Opexa’s net cash balance at closing. No fractional shares will be issued in connection with the Merger and Opexa will pay cash in lieu of any such fractional shares. Immediately following the effective time
of the Merger, (a) current Opexa shareholders are expected to own approximately 11.2% of the combined company, (b) current Acer shareholders are expected to own approximately 63.8% of the combined company (excluding any shares issued to
current shareholders in the concurrent financing), and (c) the investors participating in the concurrent financing are expected to own approximately 25% of the combined company (excluding any shares previously held by investors in the
concurrent financing), in each case calculated on a
pro-forma
basis after giving effect to (i) the issuance of shares of common stock by Acer immediately prior to the effective time of the Merger pursuant
to the terms of the subscription agreement (as discussed below) and (ii) the Merger.
Consummation of the Merger is subject to
certain closing conditions, including, among other things, approval by the respective shareholders of Opexa and Acer. The Merger Agreement contains specified termination rights for both Opexa and Acer, and further provides that, upon termination of
the Merger Agreement under specified circumstances, Opexa may be obligated to pay Acer a termination fee of $250,000, and Acer may be obligated to pay Opexa a termination fee of $1,000,000, plus, under specified circumstances, reimbursement for
various expenses incurred in connection with the Merger.
At the effective time of the Merger, the Board of Directors of Opexa is expected
to consist of seven members designated by Acer.
In connection with the Merger, Opexa will seek shareholder approval to adopt amendments
to its certificate of formation to: (a) effect a reverse split of Opexa’s common stock and (b) change Opexa’s name to Acer Therapeutics Inc., in each case subject to the consummation of the Merger.
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Also in connection with the Merger, Opexa will, at the effective time of the Merger, assume the
outstanding stock options of Acer subject to the terms of the Merger Agreement. All outstanding stock options of Opexa will be cancelled and extinguished at the effective time of the Merger without any right to receive any consideration.
In accordance with the terms of the Merger Agreement, (a) the officers and directors of Opexa have each entered into a support agreement
with Acer (the “
Opexa Support Agreements
”), and (b) the officers, directors and certain affiliated shareholders of Acer owning or controlling, in the aggregate, a majority of Acer’s outstanding capital stock have each
entered into a support agreement with Opexa (the “
Acer Support Agreements
,” and together with the Opexa Support Agreements, the “
Support Agreements
”). The Support Agreements place certain restrictions on the
transfer of the shares of capital stock of Opexa and Acer held by the respective signatories and include covenants as to the voting of such shares in favor of approving the transactions contemplated by the Merger Agreement and against taking
specified actions that could adversely affect the consummation of the Merger.
Prior to Acer’s entry into the Merger Agreement,
certain third parties, including certain existing shareholders of Acer, entered into a subscription agreement with Acer on June 30, 2017 pursuant to which such parties have agreed, subject to the terms and conditions of such agreement, to
purchase, immediately prior to the consummation of the Merger, shares of Acer’s common stock for an aggregate purchase price of approximately $15.7 million. The consummation of the transactions contemplated by such agreement is conditioned
upon, among other items, the satisfaction or waiver of the closing conditions set forth in the Merger Agreement.
The preceding summary
does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, the form of Opexa Support Agreement and the form of Acer Support Agreement, which are filed as Exhibits 2.1, 2.2 and 2.3, respectively, to this
Current Report on Form
8-K
and which are incorporated herein by reference.
Additional Information about the
Merger and Where to Find It
In connection with the Merger, Opexa and Acer intend to file relevant materials with the Securities
and Exchange Commission (the “
SEC
”), including a registration statement on Form
S-4
that will contain a proxy statement / prospectus / information statement. Investors and securityholders of
Opexa and Acer are urged to read these materials when they become available because they will contain important information about Opexa, Acer and the Merger. The proxy statement / prospectus / information statement and other relevant materials (when
they become available), and any other documents filed by Opexa with the SEC, may be obtained free of charge at the SEC web site at
www.sec.gov
. In addition, investors and securityholders may obtain free copies of the documents filed with the
SEC by Opexa by directing a written request to: Opexa Therapeutics, Inc., 2635 Technology Forest Blvd., The Woodlands, TX 77381, Attention: Investor Relations. Investors and securityholders are urged to read the proxy statement / prospectus /
information statement and the other relevant materials when they become available before making any voting or investment decision with respect to the Merger.
This communication shall 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 shall there be any sale of securities in
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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. No offering of securities
in connection with the Merger 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 the Solicitation
Opexa and Acer and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the
shareholders of Opexa in connection with the Merger. Information regarding the special interests of these directors and executive officers in the Merger will be included in the proxy statement / prospectus / information statement referred to above.
Additional information regarding the directors and executive officers of Opexa is also included in Opexa’s Annual Report on Form
10-K
for the year ended December 31, 2016 and the proxy statement for
Opexa’s 2016 annual meeting of shareholders. These documents are available free of charge at the SEC’s web site (
www.sec.gov
) and from Investor Relations at Opexa at the address set forth above.