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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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): November 15, 2021
First Wave BioPharma, Inc.
(Exact name of registrant as specified in its charter)
 
Delaware
 
001-37853
 
46-4993860
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
 
777 Yamato Road, Suite 502
Boca Raton, Florida
 
33431
(Address of principal executive offices)
 
(Zip Code)
Registrant’s telephone number, including area code: (561) 589-7020
 
Not Applicable
(Former name or former address, if changed since last report)
 
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:
 
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which
registered
Common Stock, par value $0.0001 per share
 
FWBI
 
Nasdaq Capital Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §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.
 
As previously disclosed on our Current Report on Form 8-K filed on September 13, 2021 (the “Prior 8-K”), First Wave BioPharma, Inc., a Delaware corporation (the “Company”) (formerly known as AzurRx BioPharma, Inc.) consummated its acquisition of First Wave Bio, Inc. (the “Merger”) on September 13, 2021. In connection with the Plan and Agreement of Merger (the “Merger Agreement”), Fortis Advisors LLC is the hired representative (in such capacity, the “Representative”) of the former stockholders of First Wave Bio, Inc. On October 29, 2021, the Representative filed a complaint against the Company in the Court of Chancery of the State of Delaware, seeking to enforce rights to payment of $8.0 million due October 28, 2021 pursuant to the Merger Agreement. On November 15, 2021, the Company reached an agreement with the Representative to settle the litigation (the “Settlement Agreement”), under terms that, among other things, involve a substantial reduction in immediate payment obligations and deferrals of certain remaining milestone and other payment obligations over time, with an immediate payment of $2.0 million and periodic installments of $500,000 per month payable from January 2022 through August 2022 and $1.0 million per month payable from September 2022 through July 2023 until an aggregate of $17.0 million is received. The aggregate amounts payable under the Merger Agreement, as disclosed in the Prior 8-K, remain unchanged.
 
The foregoing description of the Settlement Agreement does not purport to be complete and is qualified in its entirely by reference to the full text of the Settlement Agreement filed herewith as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
 
Item 7.01 Regulation FD Disclosure.
 
On November 16, 2021, the Company issued a press release relating to the matters described herein, a copy of which is furnished as Exhibit 99.1 hereto.
 
Item 9.01. Financial Statements and Exhibits.
 
(d)
Exhibit No.
 
Description
 
10.1
 
 
99.1
 
 
104
 
Cover Page Interactive Data File (embedded within the Inline XBRL document).
 
 
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.
 
 
First Wave BioPharma, Inc.
 
       
November 16, 2021
By:
/s/ Daniel Schneiderman
 
 
Name:
Daniel Schneiderman
 
 
Title:
Chief Financial Officer
 
 
 

Exhibit 10.1

EXECUTION VERSION

 

 

[FORTIS ADVISORS]

 

WITHOUT PREJUDICE

FOR SETTLEMENT PURPOSES ONLY

PURSUANT TO FRE 408 / CPLR 4547

 

November 15, 2021

 

First Wave BioPharma, Inc.

777 Yamato Road

Suite 502

Boca Raton, FL 33431

Attention: Dan Schneiderman and Martin Krusin

E-Mail: dschneiderman@azurrx.com and mkrusin@azurrx.com

 

Re: Fortis Advisors, LLC, in its capacity as the Shareholders’ Representative for the Former Stockholders of First Wave Bio, Inc., Plaintiff, v. First Wave BioPharma, Inc., Defendant

 

Reference is made to the ongoing litigation titled above (the “Litigation”) and to that certain Agreement and Plan of Merger dated September 13, 2021 by and among AzurRx Biopharma, Inc. (renamed First Wave BioPharma, Inc., the “Buyer”), Alpha Merger Sub, Inc., First Wave Bio, Inc. and Fortis Advisors LLC, as the Shareholders’ Representative (the “Merger Agreement”). Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Merger Agreement. In light of the desire of each party to the Litigation (the “Parties”) to settle the litigation on a mutually agreeable basis and amend the terms by which the Sellers are owed the Second Payment, the Third Payment and Milestone Payment for Milestone Event #13, the Parties hereby agree as follows:

 

 

1.

Concurrently with the execution of this letter agreement, the Buyer shall pay $2,000,000 by wire transfer of immediately available funds to the Paying Agent (for further distribution to the Sellers) pursuant to the wire instructions and account information set forth on Exhibit A.

 

 

2.

Until the Sellers have received an aggregate amount equal to the Second Payment, the Third Payment and the Milestone Payment for Milestone Event #13 less the $2,000,000 paid pursuant to paragraph 1 above (the “Aggregate Settlement Proceeds”):

 

 

a.

On the first Business Day of every month beginning on January 3rd, 2022 through and including August 2022, the Buyer shall pay $500,000 by wire transfer of immediately available funds to the Paying Agent (for further distribution to the Sellers) pursuant to the wire instructions and account information set forth on Exhibit A hereto.

 

 

b.

On the first Business Day of every month beginning on September 5, 2022, the Buyer shall pay $1,000,000 by wire transfer of immediately available funds to the Paying Agent (for further distribution to the Sellers) pursuant to the wire instructions and account information set forth on Exhibit A hereto.

 

 
 

 

 

c.

If the Buyer receives any proceeds in respect of any financing transactions that are consummated after November 14, 2021, the Buyer shall pay 10% of any such amounts in excess of $10,000,000 (the “Financing Payments”) by wire transfer of immediately available funds to the Paying Agent (for further distribution to the Sellers) pursuant to the wire instructions and account information set forth on Exhibit A hereto. Such Financing Payments shall be made on the first Business Day of the month immediately following the month in which the financing transaction occurs and shall be credited against the Aggregate Settlement Proceeds. The Financing Payments shall not reduce the amounts payable under paragraphs 2(a) or 2(b) until the Sellers have received the Aggregate Settlement Proceeds, at which point no further payments shall be required to be made under this clause 2(c). The Buyer shall provide a statement in form and substance reasonably acceptable to the Shareholders’ Representative setting forth the amount of financing raised during the preceding month and reasonably detailed supporting calculations for the Financing Payments.

 

 

d.

 If the Buyer receives, or its stockholders are entitled to receive, any proceeds from any merger, consolidation, recapitalization, reorganization, business combination, sale of assets, share exchange, joint venture, license, collaboration, or any other similar transaction (the “Transaction Proceeds”), the Buyer shall pay the Transaction Proceeds within one Business Day of the closing of such transaction by wire transfer of immediately available funds to the Paying Agent (for further distribution to the Sellers) pursuant to the wire instructions and account information set forth on Exhibit A hereto. For the avoidance of doubt, the Transaction Proceeds shall not reduce the amounts payable under paragraphs 2(a) or 2(b) above until the Sellers have received the Aggregate Settlement Proceeds, at which point no further payments shall be required to be made under this clause 2(d).

 

 

3.

Until the Sellers have received the Aggregate Settlement Proceeds, the Buyer covenants and agrees to not mortgage, encumber or permit any of its assets to become subject to a Lien without the prior written consent of the Shareholders Representative.

 

 

4.

For the avoidance of doubt, except as expressly set forth herein, all other terms of the Merger Agreement, including with respect to the Milestone Payments(other than Milestone #13), shall remain in full force and effect.

 

 

5.

Upon the receipt by the Paying Agent (for further distribution to the Sellers) of the $2 million payment described in paragraph 1 above, the Shareholders’ Representatives shall file a dismissal without prejudice of the complaint filed in the Litigation, it being understood by all parties hereto that all other claims not specifically pled in the complaint shall be preserved. This Agreement shall not be deemed or construed to be an admission of liability by any Party at any time for any purpose.

 

 
 

 

 

6.

Until the Aggregate Settlement Proceeds have been fully paid to the Sellers, the Buyer shall provide the Shareholders’ Representative upon its reasonable request with certain information about the Buyer, including but not limited to monthly financial statements of the Buyer, financing plans, budgeted and expected capital expenditures, monthly cash balance reports, general updates regarding the operations of the business. Such information shall be deemed to be Confidential Information of the Buyer.

 

 

7.

Each Party hereto acknowledges that no other Party, nor any agent nor any attorney of any other Party has made any promise, representation or warranty whatsoever, express or implied, not contained in this letter agreement concerning the subject matter hereof, or any other matter whatsoever, to induce said Party to execute or authorize the execution of this letter agreement. Each Party acknowledges that it has not executed or authorized the execution of this instrument in reliance upon any such promise, representation or warranty not contained herein.

 

 

8.

Pursuant to Section 8.6 of the Merger Agreement, the terms of this letter agreement are conditional on further approval of the Sellers. The terms of this letter agreement can only be amended or modified by a writing, signed by duly authorized representatives of all Parties hereto or the Sellers as may be required under applicable Law, expressly stating that such modification or amendment is intended. This letter agreement shall inure to the benefit of and shall be binding upon the Parties hereto and their respective successors and assigns.

 

 

9.

The Parties to this letter agreement and their counsel have reviewed and negotiated this letter agreement, and the normal rule of construction to the affect that any ambiguities in an agreement are to be resolved against the drafting parties shall not be employed in the interpretation of this letter agreement.

 

 

10.

Intentionally omitted.

 

 

11.

This letter agreement shall be governed by and construed in accordance with the laws of the State of New York. The Parties consent to the exclusive jurisdiction of the New York Supreme Court to resolve any disputes arising under this letter agreement. The Merger Agreement shall govern any disputes under the Merger Agreement as amended hereunder.

 

 

12.

This letter agreement may be executed in two or more separate counterparts (including counterparts transmitted by facsimile or other electronic transmission), each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

[Remainder of Page Intentionally Left Blank]

 

 
 

EXECUTION VERSION

 

Sincerely yours,

 

FORTIS ADVISORS, LLC

 

By: /s/ Ryan Simkin

Name: Ryan Simkin

Title: Managing Director

 

 

Acknowledged and Agreed:

 

FIRST WAVE BIOPHARMA, INC.

 

By: /s/ Daniel Schneiderman

Name: Daniel Schneiderman

Title: Chief Financial Officer

 

 

Exhibit 99.1

 

 

FIRST WAVE BIOPHARMA ANNOUNCES RESTRUCTURING OF MERGER CONSIDERATION PAYMENT TERMS WITH FORMER SHAREHOLDERS OF FIRST WAVE BIO

 

BOCA RATON, Fla., Nov. 16, 2021 (GLOBE NEWSWIRE) – First Wave BioPharma, Inc. (NASDAQ:FWBI), (“First Wave BioPharma,” or the “Company”), a clinical-stage biopharmaceutical company specializing in the development of targeted, non-systemic therapies for gastrointestinal (GI) diseases, today announced that it has agreed with the former shareholders of First Wave Bio, Inc. (“FWB”) to amend the payment structure of the initial merger consideration and extend payments into 2023 in order to provide the Company with additional financial resources for its ongoing Phase 2 clinical trial programs.

 

On September 13, 2021, the Company announced the acquisition of FWB and paid FWB an upfront cash payment of $3 million and issued $4 million of common stock. The original remaining upfront consideration of $15 million ($8 million due on October 28, 2021 and $7 million due March 31, 2022) has been restructured. Under the Revised Merger Agreement, this $15 million amount will be paid in smaller monthly installments commencing in January 2022 through mid-year 2023, until satisfied.

 

The milestone payment of $2 million, triggered upon first patient dosed in the FW-UP Phase 2 clinical trial for ulcerative proctitis, which was announced on October 14, 2021, is being paid immediately and concurrent with the signing of the Revised Merger Agreement.

 

James Sapirstein, President, and Chief Executive Officer of First Wave BioPharma, stated, “We are very pleased that we were able to restructure the remaining $15 million in consideration with the former shareholders of FWB. This revised agreement provides us with additional capital resources to advance our clinical programs through multiple value enhancing milestones in 2022.”

 

About First Wave BioPharma, Inc.
The Company is a clinical-stage biopharmaceutical company specializing in the development of targeted, non-systemic therapies for gastrointestinal (GI) diseases. The Company is currently advancing a therapeutic development pipeline populated with multiple clinical stage programs built around its two proprietary technologies – niclosamide, an oral small molecule with anti-viral and anti-inflammatory properties, and the biologic adrulipase, a recombinant lipase enzyme designed to enable the digestion of fats and other nutrients. The Company’s niclosamide portfolio is led by two clinical programs in Phase 2 clinical trials: FW-COV, for COVID-19 gastrointestinal infections and FW-UP, for ulcerative proctitis (UP) and ulcerative proctosigmoiditis. Three additional indications of niclosamide, FW-ICI-AC, for Grade 1 and Grade 2 Immune Checkpoint Inhibitor-associated colitis and diarrhea in advanced oncology patients, FW-UC (ulcerative colitis) and FW-CD (Crohn’s disease) are expected to enter the clinic in 2022 and 2023. The Company is also advancing FW-EPI (adrulipase) for the treatment of exocrine pancreatic insufficiency (EPI) in patients with cystic fibrosis and chronic pancreatitis. The Company is headquartered in Boca Raton, Florida. For more information visit www.firstwavebio.com.

 

 
 

 

Forward-Looking Statement
This press release may contain certain statements relating to future results which are forward-looking statements. It is possible that the Company’s actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements, depending on factors including whether results obtained in preclinical and nonclinical studies and clinical trials will be indicative of results obtained in future clinical trials; whether preliminary or interim results from a clinical trial will be indicative of the final results of the trial; the size of the potential markets for the Company’s drug candidates and its ability to service those markets; the effects of the First Wave Bio, Inc. acquisition and its announcement on the Company’s business, operating results and financial prospects; the integration of the First Wave Bio, Inc. business with the Company’s own business; and the Company’s current and future capital requirements and its ability to raise additional funds to satisfy its capital needs. Additional information concerning the Company and its business, including a discussion of factors that could materially affect the Company’s financial results are contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 under the heading “Risk Factors,” as well as the Company’s subsequent filings with the Securities and Exchange Commission. All forward-looking statements included in this press release are made only as of the date of this press release, and we do not undertake any obligation to publicly update or correct any forward-looking statements to reflect events or circumstances that subsequently occur or of which we hereafter become aware.

 

For more information:
First Wave BioPharma, Inc.
777 Yamato Road, Suite 502
Boca Raton, FL 33431
Phone: (561) 589-7020
info@firstwavebio.com

 

Media contact:
Tiberend Strategic Advisors, Inc.
Johanna Bennett / David Schemelia
(212) 375-2665 / (609) 468-9325
jbennett@tiberend.com / dschemelia@tiberend.com