Item 1.01 Entry into a Material Definitive Agreement.
On October 4, 2021, Aditxt, Inc. (the “Company”)
entered into a transaction agreement (the “Transaction Agreement”) with AiPharma Global Holdings LLC (“AiPharma Global”),
pursuant to which the Company agreed to reach a definitive agreement (the “Definitive Agreement”) no later than November 30,
2021 to acquire a subsidiary (“AiPharma Subsidiary” or “Holdco”) of AiPharma Global, which is to own all of the
assets of AiPharma Global following a restructuring of AiPharma Global, subject to certain termination rights described below. The Company
previously announced that it had entered into a letter of intent to acquire a target company (the “Letter of Intent”), which
was reported in the Company’s Current Report on Form 8-K dated August 25, 2021.
As previously disclosed in the Company’s Current
Report on Form 8-K dated August 30, 2021, in connection with the Letter of Intent, the Company entered into a secured credit agreement
dated August 27, 2021 (the “Credit Agreement”) with the target and certain affiliated entities, pursuant to which the Company
made a secured loan to the target company in the principal amount of $6.5 million. In connection with the Credit Agreement, the Company
entered into security agreements with certain affiliates of the target company.
On October 5, 2021, the Company issued a press release
announcing signing of the Transaction Agreement and the identity of the target company as AiPharma Global. AiPharma Global is a biopharmaceutical
company that holds directly, or through its affiliates worldwide (excluding Japan), exclusive rights to certain oral antiviral drugs that
target COVID-19.
Pursuant to the Transaction Agreement, the Company
also agreed to permit AiPharma Global to borrow an additional principal amount of $8.5 million (the “Additional Borrowings”)
under the Credit Agreement. The Company and AiPharma Global agreed to amend the Credit Agreement and related documents as promptly as
practicable and to extend the maturity date under the Credit Agreement to November 30, 2021.
The Transaction Agreement contemplates two events.
First, upon the execution of the Definitive Agreement (the “Initial Closing”), AiPharma Global would acquire 19.99% of the
Company’s common stock as of September 30, 2021, subject to the filing of the Company’s Quarterly Report on Form 10-Q (the
“Initial Shares”), in exchange for 10% of the issued and outstanding equity interests of AiPharma Subsidiary. In addition,
the Company would forgive all amounts then outstanding under the Credit Agreement, as amended. Following the execution of the Definitive
Agreement, the Company has also agreed to take all necessary action to cause two individuals designated by AiPharma Global to be appointed
to the board of directors of the Company.
The Transaction Agreement may be terminated: (i) by
the mutual agreement of the parties, (ii) by either party if the Definitive Agreement has not been executed by November 30, 2021, (iii)
by either party if there has been a material breach or any material failure to perform any covenant or agreement and such breach or failure
has not been cured or is incapable of being cured, (iv) by the Company if the Company is not satisfied with certain due diligence conditions,
(v) by the board of directors of the Company if it received a proposal that it deems to be superior to the AiPharma Global proposal described
in the Transaction Agreement, (vi) by AiPharma Global if the Company breaches certain covenants under the Transaction Agreement restricting
issuances of securities during the period from execution of the Transaction Agreement through the Initial Closing or termination of the
Transaction Agreement, or (vii) if at any time prior to the Initial Closing or earlier termination of the Transaction Agreement, the Initial
Shares and Secondary Shares (defined below) represent less than 50.1% of the issued and outstanding shares of the Company. In the event
that the Transaction Agreement is terminated pursuant to (i) or (ii), AiPharma Global is required to pay the Termination Fee to the Company
by November 30, 2021. The Credit Agreement provides for a termination fee of $4 million (the “Termination Fee”) in the event
that the Definitive Agreement is not entered into by November 30, 2021.In the event that the Transaction Agreement is terminated by the
Company pursuant to (iii) or (iv), AiPharma Global is required to pay the Termination Fee to the Company by November 30, 2021. In the
event that the Transaction Agreement is terminated by AiPharma Global pursuant to (iii) or (vi), the Company is required to pay AiPharma
Global a termination fee of $4 million and AiPharma Global is not required to pay the Termination Fee. In the event that the Transaction
Agreement is terminated by AiPharma Global pursuant to (vii), the Company is not required to pay a termination fee and AiPharma Global
is not required to pay the Termination Fee.
The Secondary Closing (as defined below) is conditioned
upon certain closing conditions, including but not limited to: (i) the approvals of the stockholders of the Company of all matters required
for the Secondary Closing, and (ii) Nasdaq approval of the issuance of shares to AiPharma Global at the Secondary Closing and the continued
listing of the Company’s common stock following the Secondary Closing (collectively, the “Closing Conditions”).
The second event under the Transaction Agreement occurs
upon the satisfaction of all Closing Conditions (the “Secondary Closing”), the Company shall issue an additional number of
shares of the Company’s common stock, that yields 65.00% of the Company’s outstanding shares of common stock as of September
30, 2021 (the “Secondary Shares”) to AiPharma Global in exchange for all remaining equity interests of AiPharma Subsidiary.
The foregoing description of the Transaction Agreement
is qualified in its entirety to the complete text of the Transaction Agreement, a copy of which will be filed as an exhibit to the Company’s
Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, and is intended to provide investors and security holders with
information regarding its terms. It is not intended to provide any other factual information about the Company, AiPharma Global
or AiPharma Subsidiary. The Transaction Agreement contains representations and warranties that the parties to the Transaction
Agreement made to, and solely for the benefit of, each other. The assertions embodied in those representations and warranties are
subject, in some cases, to specified exceptions, qualifications, limitations and supplemental information, including knowledge qualifiers
and contractual standards of materiality, such as materiality qualifiers and the occurrence of a material adverse effect, that are different
from those generally applicable under federal securities law, as well as detailed information set forth in disclosure letter provided
by us in connection with signing the Transaction Agreement. In addition, some representations and warranties may have been included
in the Transaction Agreement for the purpose of allocating risk between the Company, AiPharma Global and AiPharma rather than to establish
matters as facts. The Transaction Agreement is described in this Current Report on Form 8-K only to provide you with information
regarding its terms and conditions, and not to provide any other factual information regarding the Company or its business. Accordingly,
you should not rely on the representations and warranties as characterizations of the actual state of facts, since (i) they were
made only as of the date of the Transaction Agreement or a prior, specified date, (ii) in some cases they are subject to knowledge,
materiality and material adverse effect qualifiers, and (iii) they are modified in important part by detailed information included
in the disclosure letter. Finally, information concerning the subject matter of the representations and warranties may have changed
since the date of the Transaction Agreement, which subsequent information may or may not be fully reflected in the Company’s public
disclosures.
Additional Information and Where to Find It
If the Definitive Agreement
is entered into, it is contemplated by the Transaction Agreement that, a Proxy Statement / Registration Statement on Form S-4 (the “Registration
Statement”) will be filed with the Securities and Exchange Commission (the “SEC”), which will include preliminary and
definitive proxy statements to be distributed to Aditxt’s shareholders in connection with Aditxt’s solicitation for proxies
for the vote by Aditxt’s shareholders in connection with the proposed transaction and other matters specified in the Proxy
Statement / Registration Statement, as well as the prospectus relating to the offer of securities
to be issued to AiPharma Global’s shareholders in connection with the completion of the proposed transaction. After the Proxy
Statement / Registration Statement has been filed and declared effective, Aditxt will mail a definitive proxy statement and other relevant
documents to its shareholders as of the record date established for voting on the proposed business combination. WE URGE INVESTORS
TO READ THESE MATERIALS CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY AND THE
DEFINITIVE AGREEMENT. Investors will be able to obtain free copies of these materials on the SEC’s website at http://www.sec.gov.
Free copies of the Company’s SEC filings are also available from Aditxt, Inc., 737 N. Fifth Street, Suite 200, Richmond, VA 23219,
Attn: Amro Albanna, Chief Executive Officer.
INVESTMENT IN ANY SECURITIES DESCRIBED HEREIN
HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SEC OR ANY OTHER REGULATORY AUTHORITY NOR HAS ANY AUTHORITY PASSED UPON OR ENDORSED THE MERITS
OF THE OFFERING OR THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED HEREIN. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Participants in the Solicitation
The Company and its executive officers, directors,
other members of management, employees and AiPharma Global may be deemed, under SEC rules, to be participants in the solicitation of proxies
from the Company’s shareholders with respect to the proposed transaction. Information regarding the executive officers and
directors of the Company is set forth in its definitive proxy statement for its 2021 annual meeting filed with the SEC on April 5, 2021.
More detailed information regarding the identity of potential participants, and their direct or indirect interests, by securities holdings
or otherwise, will be set forth in the Proxy Statement / Registration Statement on Form S-4 and other materials to be filed with the SEC
in connection with the Definitive Agreement.