Inc. (“APCL”), which in turn is controlled by Dr. Mary Luo, Chief Operating Officer, Chief Scientist, and Chairman of the Board of the Company, and Dr. Jack Zhang, Chief Executive Officer, President, and Chief Scientific Officer, and Director.
The Company engaged a financial advisor to conduct an independent third party valuation to determine the transaction price. The independent disinterested members of the Company’s Board of Directors engaged a separate independent financial service firm to evaluate the transaction and render an opinion as to the fairness of the transaction price as part of their evaluation and approval of these transactions.
The parties to the SPA include William J. Peters, Rong Zhou, Jacob Liawatidewi, Howard Lee, Richard Koo, Stephen Shohet, Henry Zhang, Qingqing Chen, Chongqing Zhang, Lu Zhang, and James Luo. Dr. Mary Luo, Dr. Jack Zhang, APCL, and Qianqia are not parties to the SPA and will retain their interest in ANP. The proceeds received in the SPA by each of such individuals is set forth below:
| | |
Investor | Investment Proceeds under Share Purchase Agreement |
William J. Peters | $ | 120,783 |
Rong Zhou | $ | 120,783 |
Jacob Liawatidewi | $ | 120,783 |
Howard Lee | $ | 1,207,829 |
Richard Koo | $ | 966,263 |
Henry Zhang and Qingqing Chen | $ | 7,860,907 |
Chongqing Zhang | $ | 157,902 |
Lu Zhang | $ | 1,974,114 |
James Luo | $ | 120,783 |
The parties to the SRA include Dr. Mary Luo, Dr. Jack Zhang (through their ownership interest in APCL and Qianqia), Henry Zhang, Qingqing Chen, Chongqing Zhang, Bill Zhang, and Lu Zhang. In addition, as part of the restructuring, the Company will be terminating the 2018 ANP Equity Incentive Plan. As part of this termination, Henry Zhang will receive a cash payment of approximately $524,000 for his stock options in ANP. He will also be departing the Company upon completion of the spin-off and will become a member of the management of Hanxin.
Prior to the restructuring, Hanxin entered into contracts with ANP for ANP to perform contract manufacturing including the manufacturing of stability batches of certain pharmaceutical products to be sold in China. At the time of the restructuring approximately $866,000 of work remained to be performed from 2021 to 2024. Subsequent to the restructuring, the Amphastar Board of Directors approved the remainder of these contracts. After the restructuring and prior to year-end, ANP recognized sales of $59,000 from these contracts.
Purchase of ownership interest of ANP
On August 19, 2021, Amphastar Pharmaceuticals, Inc. (the “Company”) entered into a Share Purchase Agreement (“SPA”) to acquire approximately 15% of the ownership interest of ANP from Qianqia, to further consolidate the Company’s ownership of its Chinese subsidiary ANP. Qianqia had initially acquired its ownership interest in the previously disclosed ANP Private Placement.
The total cash payment by the Company for this transaction was $22.5 million. After the completion of the transaction, the Company owns 100% of ANP.