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Item 1.01
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Entry
into a Material Definitive Agreement.
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Adoption
of Agreement and Plan of Merger and Consummation of Reorganization
Inspyr Therapeutics, Inc,.
a Delaware corporation (“Inspyr”), is implementing a holding company reorganization pursuant to an Agreement and Plan of Merger
(the “Merger Agreement”), dated as of September 28, 2021, among Inspyr, Rebus Holdings, Inc. a Delaware corporation (“Holding
Company”), and Rebus Sub, Inc., a Delaware corporation and wholly-owned subsidiary of Holding Company (“Merger Sub”),
which will result in the Holding Company becoming the direct parent company of Inspyr and replacing Inspyr as the public company trading
on the OTC Markets (“OTC”) (the “Reorganization”).
Pursuant
to the Merger Agreement, Merger Sub will merge with Inspyr pursuant to the filing of a certificate of merger (the “Certificate
of Merger”), with Inspyr surviving as a direct, wholly-owned subsidiary of Holding Company (the “Merger”). At the effective
time of the Merger (the “Effective Time”), subject
to the approval of the Financial Industry Regulatory Authority or FINRA:
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(i)
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Each
outstanding share of Inspyr common stock, par value $0.0001 per share (“Inspyr Common
Stock”), will automatically be converted into one share of common stock, par value
$0.0001 per share, of Holding Company (“Holding Company Common Stock”), having
the same designation, rights, powers, and preferences, and qualifications, limitations, and
restrictions as a share of Inspyr Common Stock immediately prior to the Reorganization;
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(ii)
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Each
outstanding share of Inspyr Series A Convertible Preferred Stock, par value $0.0001 per share
(“Inspyr Series A Stock”), will automatically be converted into one share of
Series A Convertible Preferred Stock par value $0.0001 per share, of Holding Company (“Holding
Company Series A Stock”), having the same designation, rights, powers, and preferences,
and qualifications, limitations, and restrictions as a share of Inspyr Series A Stock immediately
prior to the Reorganization;
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(iii)
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Each
outstanding share of Inspyr Series B Convertible Preferred Stock, par value $0.0001 per share
(“Inspyr Series B Stock”), will automatically be converted into one share of
Series B Convertible Preferred Stock par value $0.0001 per share, of Holding Company (“Holding
Company Series B Stock”), having the same designation, rights, powers, and preferences,
and qualifications, limitations, and restrictions as a share of Inspyr Series B Stock immediately
prior to the Reorganization;
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(iv)
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Each
outstanding share of Inspyr Series C Convertible Preferred Stock, par value $0.0001 per share
(“Inspyr Series C Stock”), will automatically be converted into one share of
Series C Convertible Preferred Stock par value $0.0001 per share, of Holding Company (“Holding
Company Series C Stock”), having the same designation, rights, powers, and preferences,
and qualifications, limitations, and restrictions as a share of Inspyr Series C Stock immediately
prior to the Reorganization;
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(v)
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Each
outstanding share of Inspyr Series D Convertible Preferred Stock, par value $0.0001 per share
(“Inspyr Series D Stock”), will automatically be converted into one share of
Series D Convertible Preferred Stock par value $0.0001 per share, of Holding Company (“Holding
Company Series D Stock”), having the same designation, rights, powers, and preferences,
and qualifications, limitations, and restrictions as a share of Inspyr Series D Stock immediately
prior to the Reorganization;
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(vi)
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Each
outstanding share of Inspyr Series E Convertible Preferred Stock, par value $0.0001 per share
(“Inspyr Series E Stock”), will automatically be converted into one share of
Series E Convertible Preferred Stock par value $0.0001 per share, of Holding Company (“Holding
Company Series E Stock”), having the same designation, rights, powers, and preferences,
and qualifications, limitations, and restrictions as a share of Inspyr Series E Stock immediately
prior to the Reorganization; and
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(vii)
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Each
outstanding share of Inspyr Series F Convertible Preferred Stock, par value $0.0001 per share
(“Inspyr Series F Stock”), will automatically be converted into one share of
Series F Convertible Preferred Stock par value $0.0001 per share, of Holding Company (“Holding
Company Series F Stock”), having the same designation, rights, powers, and preferences,
and qualifications, limitations, and restrictions as a share of Inspyr Series F Stock immediately
prior to the Reorganization.
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Accordingly,
upon consummation of the Reorganization (and the Reverse Stock Split as defined below), Inspyr stockholders will automatically became
stockholders of Holding Company, on a one-for-one basis, with the same number and approximate ownership percentage of shares
of the same class as they held in Inspyr immediately prior to the Effective Time. The Reorganization is intended to be a tax-free transaction
for U.S. federal income tax purposes for Inspyr stockholders.
The
Reorganization is being conducted pursuant to Section 251(g) of the General Corporation Law of the State of Delaware (the “DGCL”),
which provides for the formation of a holding company without a vote of the stockholders of the constituent corporation. The conversion
of stock will occur automatically without an exchange of stock certificates. In addition, at the Effective Time:
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Each
outstanding and unexpired option to purchase Inspyr Common Stock will automatically be converted
into one share of Holding Company Common Stock;
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Each
outstanding warrant to purchase Inspyr Common Stock (“Inspyr Warrant”), whether
or not vested, will automatically be converted into and become a warrant to purchase Holding
Company Common Stock (“Holding Company Warrant”) and Holding Company will assume
each Inspyr Warrant in accordance with the terms of each Inspyr Warrant, and such Holding
Company Warrant will have the same number of shares, the same exercise price (subject to
adjustments), the same restrictions on exercise, and any other provisions contained in the
Inspyr Warrants; and
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Each
outstanding convertible debt instrument of Inspyr, including but not limited to, promissory
notes or debentures that are convertible into Inspyr Common Stock (“Inspyr Convertible
Notes”) will automatically be converted into, assumed, and become the convertible debt
instruments of the Holding Company (“Holding Company Convertible Notes”).
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As
a result of the Reorganization, the Holding Company will become the successor issuer to Inspyr pursuant to Rule 12g-3(a) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as a result, shares of Holding Company Common Stock
are deemed registered under Section 12(g) of the Exchange Act as the common stock of the successor issuer.
Reverse
Stock Split
As
previously disclosed in the Definitive Proxy Statement filed by Inspyr on September 3, 2021, pursuant to a written consent, Inspyr’s
shareholders approved a proposal authorizing the board of directors of Inspyr (“Board”) to effect a reverse stock split of
the Company’s common stock, par value $0.0001 (the “Common Stock”).
On
September 1, 2021, the Board approved a one-for-seventy-five (1-for-75) reverse stock split of the Inspyr Common Stock (“Reverse
Stock Split”). In furtherance of the Reverse Stock Split, Inspyr has filed an amended and restated certificate of incorporation
(“Amended and Restated Certificate of Incorporation”) with the Secretary of State of Delaware to effect the Reverse Stock
Split effective as of 4:59 p.m. Eastern Time on October 5, 2021, but the trading post Reverse Stock Split will not occur until FINRA
approval is received (“Reverse Split Effective Time”).
As
a result, at the Reverse Split Effective Time (and just prior to the completion of the Reorganization, subject to FINRA approval of
each), each of the holders of Inspyr Common Stock will receive one (1) new share of Inspyr Common Stock for every seventy-five
(75) shares such shareholder held immediately prior to the Reverse Split Effective Time. The Reverse Stock Split will also
affect the Company’s outstanding stock options, warrants and other exercisable or convertible instruments and will result in
the shares underlying such instruments being reduced and the exercise price being increased proportionately to the Reverse Stock
Split ratio. No fractional shares will be issued as a result of the Reverse Stock Split. Any fractional shares that would have
otherwise resulted from the Reverse Stock Split will be rounded up to the next whole number of shares.
As
a result of the Reverse Stock Split, the number of issued and outstanding shares of Common Stock will be adjusted from 718,202,289
(assuming no change in issued and outstanding until such date) shares to approximately 9,576,030 shares. Additionally, pursuant to
the terms of their Certificates of Designation, each Series of Inspyr preferred stock will have the conversion price at which shares
of such applicable preferred stock may be converted into shares of Inspyr Common Stock proportionately adjusted to reflect the
Reverse Stock Split. Additionally, all outstanding options, warrants and convertible debt of Inspyr will be adjusted proportionately
pursuant to the Reverse Stock Split.
Upon
the completion of the Reorganization immediately after, each shareholder will have such number of shares of Holding Company Common Stock
and Holding Company Preferred Stock as the shareholder would have held of Inspyr immediately following the Reverse Stock Split.
Post
Reverse Stock Split and Reorganization Information
Following the completion of the (i) Reverse
Stock Split and (ii) the Reorganization, the Holding Company Common Stock will begin trading on post Reverse Stock Split and post
Reorganization basis on Pink Sheets of the OTC Markets Group upon completion and approval of the FINRA review and confirmation of a
new trading symbol, which we expect to receive soon after the filing of this Current Report. We will announce the new trading symbol and CUSIP via press release prior to
the date when such trading begins on a post Reverse Stock Split and Reorganization basis.
At the Effective Time, the officers and
members of the Board of Inspyr will become the officers and members of the board of directors of the Holding Company.
Immediately
after the consummation of the Reorganization, the Holding Company will have, on a consolidated basis, the same assets, businesses, and
operations as Inspyr will have had immediately prior to the consummation of the Reorganization.
The
foregoing does not purport to be a complete description of the Reverse Stock Split and the subsequent Reorganization and each are qualified
in their entirety by reference to (i) the Amended and Restated Certificate of Incorporation effecting the Reverse Stock Split, (ii) the
Merger Agreement, and (iii) the Certificate of Merger, a copy of each of which is filed as Exhibit 3.01(i), 2.01, and 3.02(i), respectively,
to this Current Report on Form 8-K and each are incorporated by reference herein.