UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
August 8, 2017
CEMPRA, INC.
(Exact
name of registrant as specified in its charter)
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Delaware
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001-35405
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45-4440364
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(State or other jurisdiction
of incorporation)
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(Commission
File Number)
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(IRS Employer
ID Number)
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6320 Quadrangle Drive, Suite 360, Chapel Hill, NC
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27517
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(Address of principal executive offices)
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(Zip Code)
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Registrants telephone number, including area code (919)
313-6601
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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule
14a-12
under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule
14d-2(b)
under the Exchange Act (17 CFR
240.14d-2(b))
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Pre-commencement
communications pursuant to Rule
13e-4(c)
under the Exchange Act (17 CFR
240.13e-4(c))
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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. ☐
Item 1.01. Entry into a Material Definitive Agreement.
Agreement and Plan of Merger
On
August 8, 2017, Cempra, Inc. (Cempra), Castle Acquisition Corp., a Delaware corporation and a direct wholly owned subsidiary of Cempra (Merger Sub), and Melinta Therapeutics, Inc., a Delaware corporation
(Melinta), entered into an Agreement and Plan of Merger and Reorganization (the Merger Agreement). Subject to the terms and conditions set forth in the Merger Agreement, Merger Sub will merge with and into Melinta (the
Merger), with Melinta surviving the Merger as a wholly owned subsidiary of Cempra (the Surviving Corporation).
At
the effective time of the Merger (the Effective Time), each outstanding share of Melintas common stock (including shares of Melinta common stock to be issued on conversion of Melintas outstanding convertible promissory notes
and preferred stock) will be converted into the right to receive shares of Cempras common stock, par value $0.001 per share (Cempra Common Stock), in an amount equal to the exchange ratio calculated pursuant to the Merger Agreement
(the Exchange Ratio) (except that Melinta stockholders who do not meet the definition of an accredited investor under applicable federal securities law will receive a
per-share
cash
payment based on the closing price of Cempra Common Stock on the closing date of the Merger multiplied by the Exchange Ratio). Each outstanding Melinta option and warrant will become options and warrants to purchase Cempra Common Stock.
Under the Exchange Ratio, as of immediately after the Merger, the former Melinta stockholders are expected to own, on a fully-diluted basis as
calculated under the treasury stock method, approximately 51.9% of Cempra Common Stock and the former Cempra stockholders are expected to own approximately 48.1% of Cempra Common Stock. The final number of shares will be subject to adjustments at
the closing of the Merger based on Cempras cash levels (net of debt and transaction expenses) and Melintas debt levels (above a permitted amount) and transaction expenses.
The Merger is intended to qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of
1986, as amended.
The Merger Agreement contains customary representations, warranties and covenants made by Cempra and Melinta, including
covenants relating to obtaining the requisite approvals of the stockholders of Cempra and Melinta, indemnification of directors and officers, and Cempras and Melintas conduct of their respective businesses between the date of signing of
the Merger Agreement and the closing of the Merger.
The issuance of Cempra Common Stock and other transactions contemplated by the Merger
Agreement are subject to approval by Cempras stockholders. The Merger is subject to other customary closing conditions, including, among other things, the accuracy of the representations and warranties, subject generally to an overall material
adverse effect qualification, compliance by the parties with their respective covenants, no existence of any law or order preventing the Merger and related transactions and Cempra and Melinta receiving opinions from their respective legal advisers
to the effect that, on the basis of the facts, representations and assumptions set forth or referred to in such opinion, the Merger will constitute a
tax-free
reorganization.
The Merger Agreement contains certain termination rights for both Cempra and Melinta and provides
for the payment of a termination fee of $7,900,000 by each of Cempra and Melinta to the other party upon termination of the Merger Agreement under specified circumstances. If Cempras stockholders do not approve the issuance of shares in the
Merger, and either party thereafter terminates the Merger Agreement, Cempra will reimburse up to $2,000,000 of out of pocket costs incurred by Melinta in connection with the transactions (and any termination fee subsequently payable by Cempra would
be reduced by the amount of any such expense reimbursement).
Following the Merger, the board of directors of the Surviving Corporation
will be increased to nine members and will be comprised of four directors designated by Cempra, four directors designated by Melinta (one of whom will be chairman, designated by Melinta) and a newly appointed chief executive officer, who will be
jointly chosen by Cempra and Melinta pursuant to the terms of the Merger Agreement (provided that if a jointly chosen chief executive officer is not appointed as of the closing of the Merger, the initial chairman of the board will serve as interim
chief executive officer). Each board committee will initially be comprised of two Cempra designees and two Melinta designees.
The Merger
Agreement has been filed as an exhibit to this Form
8-K
to provide security holders with information regarding the terms of the Merger Agreement and is not intended to modify or supplement any factual
disclosures about Cempra in its public reports filed with the U.S. Securities and Exchange Commission (the SEC). In particular, the Merger Agreement and related summary are not intended to be, and should not be relied upon as,
disclosures regarding any facts and circumstances relating to Cempra. The representations and warranties contained in the Merger Agreement have been negotiated with the principal purposes of establishing the circumstances in which a party may have
the right not to close the Merger if the representations and warranties of the other party prove to be untrue due to a change in circumstance or otherwise, and allocating risk between the parties, rather than establishing matters as facts.
The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger
Agreement, which is filed as Exhibit 2.1 and is incorporated by reference.
Voting and
Lock-Up
Agreements
Concurrently with the execution of the Merger Agreement, certain Cempra stockholders, beneficially owning in the aggregate
approximately 11.5% of Cempras Common Stock, entered into voting and
lock-up
agreements with Melinta, and certain Melinta stockholders, beneficially owning in the aggregate approximately 91.5% of
Melintas capital stock, entered into voting and
lock-up
agreements with Cempra (collectively, the Voting and
Lock-Up
Agreements). Pursuant to the
Voting and
Lock-Up
Agreements, among other things, the stockholders party thereto will vote their shares of Cempra or Melinta, as applicable, in favor of the transactions contemplated by the Merger Agreement,
and each such stockholder will be subject to a
180-day
lock-up on
the sale of shares of capital stock of Cempra, which period shall begin upon the consummation of
the Merger.
Item 3.02. Unregistered Sale of Equity Securities.
The merger consideration to be issued by Cempra to the Melinta stockholders pursuant to the Merger Agreement, as described in Item 1.01 of this
report, which description is incorporated by reference into this Item 3.02, will consist of unregistered shares of Cempra Common Stock. Such shares will be issued in a private placement exempt from registration under 4(2) of the Securities Act
of 1933, as amended (the Securities Act), because the offer and sale of such securities does not involve a public offering as defined in Section 4(2) of the Securities Act and other applicable requirements were met.
Item 5.01. Change in Control of Registrant.
The completion of the Merger, which is described in Item 1.01 of this report and which is incorporated by reference into this Item 5.01,
is expected to constitute a change in control of Cempra. At the Effective Time, Cempra will change its name to Melinta Therapeutics, Inc.
Item 8.01. Other Events.
On
August 9, 2017, Cempra issued a press release announcing its entry into the Merger Agreement with Melinta, as described in Item 1.01 of this Current Report on Form
8-K.
A copy of this press release
is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Cautionary Note Regarding Forward-Looking Statements
Certain statements in this communication regarding the proposed merger and other contemplated transactions (including statements relating to
satisfaction of the conditions to and consummation of the proposed merger, the expected ownership of the combined company and the alternatives to the proposed merger) constitute forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the Securities Exchange Act and are usually identified by the use of words such as anticipates, believes, estimates, expects,
intends, may, plans, projects, seeks, should, will, and variations of such words or similar expressions. We intend these forward-looking statements to be covered by
the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Securities Exchange Act and are making this statement for purposes of complying with those safe harbor
provisions. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we
believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be
attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control.
Risks and uncertainties for Cempra and Melinta and of the combined company include, but are not limited to: inability to complete the
proposed merger and other contemplated transactions; liquidity and trading market for shares prior to and following the consummation of the proposed merger; costs and potential litigation associated with the proposed merger; failure or delay in
obtaining required
approvals by the SEC or any other governmental or quasi-governmental entity necessary to consummate the proposed merger, including our ability to file an effective proxy statement in connection
with the proposed merger and other contemplated transactions, which may also result in unexpected additional transaction expenses and operating cash expenditures on the parties; failure to obtain the necessary stockholder approvals or to satisfy
other conditions to the closing of the proposed merger and the other contemplated transactions; a superior proposal being submitted to either party; failure to issue Cempra common stock in the proposed merger and other contemplated transactions
exempt from registration or qualification requirements under applicable state securities laws; risks related to the costs, timing and regulatory review of the combined companys studies and clinical trials, including its ability to address the
issues identified by the FDA in the complete response letter relating to Cempras new drug applications for solithromycin for community acquired bacterial pneumonia; uncertainties in obtaining successful clinical results for product candidates
and unexpected costs that may result therefrom; inability or the delay in obtaining required regulatory approvals for product candidates, which may result in unexpected cost expenditures; failure to realize any value of certain product candidates
developed and being developed, in light of inherent risks and difficulties involved in successfully bringing product candidates to market; inability to develop new product candidates and support existing products; inability to commercialize and
launch any product candidate that receives regulatory approval, including Baxdela; the combined companys anticipated capital expenditures, its estimates regarding its capital requirements and its need for future capital; uncertainties of cash
flows and inability to meet working capital needs; cost reductions that may not result in anticipated level of cost savings or cost reductions prior to or after the consummation of the proposed merger; the approval by the FDA and EMA and any other
similar foreign regulatory authorities of other competing or superior products brought to market; risks resulting from unforeseen side effects; risk that the market for the combined companys products may not be as large as expected; inability
to obtain, maintain and enforce patents and other intellectual property rights or the unexpected costs associated with such enforcement or litigation; inability to obtain and maintain commercial manufacturing arrangements with third party
manufacturers or establish commercial scale manufacturing capabilities; loss of or diminished demand from one or more key customers or distributors; unexpected cost increases and pricing pressures; the possibility of economic recession and its
negative impact on customers, vendors or suppliers; and risks associated with the possible failure to realize certain benefits of the proposed merger, including future financial, tax, accounting treatment, and operating results. Many of these
factors that will determine actual results are beyond Cempras, Melintas, or the combined companys ability to control or predict.
Other risks and uncertainties are more fully described in our Annual Report on Form
10-K
for the
year ended December 31, 2016, as amended, filed with the SEC, and in other filings that Cempra makes and will make with the SEC in connection with the proposed transactions, including the proxy statement described below under Important
Information and Where to Find It. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The statements made in this press release or
presentation speak only as of the date stated herein, and subsequent events and developments may cause our expectations and beliefs to change. While we may elect to update these forward-looking statements publicly at some point in the future, we
specifically disclaim any obligation to do so, whether as a result of new information, future events or otherwise, except as required by law. These forward-looking statements should not be relied upon as representing our views as of any date after
the date stated herein.
Important Information and Where to Find It
Cempra and Melinta and certain of their directors and executive officers may become participants in solicitation of proxies from Cempra
stockholders in connection with the proposed transactions. Additional Information regarding persons who may, under the rules of the SEC, be deemed to be participants in the solicitation of the Cempra stockholders in connection with the proposed
merger, and who have interests, whether as security holders, directors or employees of Cempra or Melinta or otherwise, which may be different from those of Cempra stockholders generally, will be provided in the proxy statement and other materials to
be filed with the SEC.
Each of Cempras board of directors, Garheng Kong, David Zaccardelli, Richard Kent, David Gill, Dov A.
Goldstein, John H. Johnson, P. Sherrill Neff and Michael Dougherty; Cempras executive officers Mark W. Hahn (Executive Vice President and Chief Financial Officer), David Oldach (Chief Medical Officer) and John Bluth (Executive Vice President,
Investor Relations and Corporate Communications); Melintas board of directors, Eugene Sun, Thomas Koestler, Erik Akhund, Kevin Ferro, Cecilia Gonzalo, Christopher Kiritsy, Pedro Lichtinger, Sean Murphy and John E. Sununu; and Melintas
executive officers, John Temperato (President and Chief Operating Officer) and Paul Estrem (Chief Financial Officer); may be deemed participants in the solicitation of proxies from the Cempra stockholders in connection with the proposed
transactions.
Information regarding Cempras directors and executive officers respective interests in Cempra by security
holdings or otherwise is set forth in Cempras Amendment No. 1 to the Annual Report on Form
10-K/A
for the year ended December 31, 2016 filed with the SEC on April 13, 2017. The following
is a list of current approximate shares of Cempra common stock beneficially held by each of the foregoing Cempra directors and officers listed above: Garheng Kong (132,114), David Zaccardelli (125,000), Richard Kent (2,445,996), David Gill (98,750),
Dov A. Goldstein (72,221), John H. Johnson (122,534), P. Sherrill Neff (2,690,286), Michael Dougherty (80,750), Mark W. Hahn (265,710), David Oldach (111,486) and John Bluth (14,063).
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or
approval. A definitive proxy statement and a proxy card will be filed with the SEC and will be mailed to Cempras stockholders seeking any required stockholder approvals in connection with the proposed transactions. BEFORE MAKING ANY VOTING OR
INVESTMENT DECISION, INVESTORS AND STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT CEMPRA MAY FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTIONS. Stockholders may obtain, free of charge, copies of the definitive proxy statement and any other documents filed by Cempra with the SEC in connection with the proposed transactions at the
SECs website (http://www.sec.gov), at Cempras website (http://investor.cempra.com/), or by writing to the Secretary, Cempra, Inc. at 6320 Quadrangle Drive, Suite 360, Chapel Hill, North Carolina 27517.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
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Exhibit No.
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Description
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2.1*
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Agreement and Plan of Merger and Reorganization, dated as of August 8, 2017, among Cempra, Inc., Castle Acquisition Corp. and Melinta Therapeutics, Inc.
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99.1
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Press release dated August 9, 2017.
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Certain schedules to the Merger Agreement have been omitted pursuant to Item 601(b)(2) of Regulation
S-K.
Cempra, Inc. hereby undertakes to furnish supplementally copies of any of
the omitted schedules upon request by the SEC.
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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.
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CEMPRA, INC.
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Date:
August 10, 2017
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/s/ Mark W. Hahn
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Mark W. Hahn, Chief Financial Officer
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