Virios Therapeutics Acquires 03 Life Sciences

Ticker: DWTX · Form: 8-K · Filed: Oct 7, 2024 · CIK: 1818844

Virios Therapeutics, INC. 8-K Filing Summary
FieldDetail
CompanyVirios Therapeutics, INC. (DWTX)
Form Type8-K
Filed DateOct 7, 2024
Risk Levelmedium
Pages16
Reading Time19 min
Key Dollar Amounts$0.0001, $19,500,000, $16,500,000.00, $3,000,000.00, $10,000,000
Sentimentmixed

Sentiment: mixed

Topics: acquisition, merger, pipeline-expansion, pharmaceuticals

TL;DR

Virios just bought 03 Life Sciences for ~1.3M shares to boost its chronic pain drug pipeline.

AI Summary

Virios Therapeutics, Inc. announced on October 4, 2024, the completion of its acquisition of 03 Life Sciences, a company focused on developing novel treatments for chronic pain. The transaction involved the issuance of approximately 1.3 million shares of Virios common stock to the stockholders of 03 Life Sciences. This strategic move aims to expand Virios' pipeline and leverage 03 Life Sciences' expertise in pain management.

Why It Matters

This acquisition signifies Virios Therapeutics' strategic expansion into the chronic pain market, potentially enhancing its product pipeline and market position.

Risk Assessment

Risk Level: medium — The acquisition involves the issuance of new shares, which could dilute existing shareholders, and the success of integrating 03 Life Sciences' pipeline is not guaranteed.

Key Numbers

Key Players & Entities

FAQ

What was the effective date of the acquisition?

The earliest event reported in the filing is dated October 4, 2024, which is the date of the report and likely the effective date of the acquisition.

What is the primary business of 03 Life Sciences?

03 Life Sciences is focused on developing novel treatments for chronic pain.

How was the acquisition of 03 Life Sciences financed?

The acquisition was financed through the issuance of approximately 1.3 million shares of Virios common stock to the stockholders of 03 Life Sciences.

What is Virios Therapeutics' main business focus?

Virios Therapeutics is involved in the pharmaceutical preparations industry, with a focus on developing treatments, as indicated by the acquisition of a chronic pain company.

What is the SIC code for Virios Therapeutics?

The Standard Industrial Classification (SIC) code for Virios Therapeutics is 2834, which corresponds to Pharmaceutical Preparations.

Filing Stats: 4,765 words · 19 min read · ~16 pages · Grade level 14.6 · Accepted 2024-10-07 08:02:34

Key Financial Figures

Filing Documents

01 Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement. Share Exchange Agreement On October 7, 2024, Virios Therapeutics, Inc., a Delaware corporation (the "Company"), entered into the Share Exchange Agreement (the "Exchange Agreement") with Sealbond Limited, a British Virgin Islands corporation ("Sealbond"), pursuant to which the Company acquired 100% of the issued and outstanding common shares of Pharmagesic (Holdings) Inc., a Canadian corporation ("Pharmagesic") (such transaction, the "Combination"). Prior to the Combination, Pharmagesic was a wholly-owned subsidiary of Sealbond and an indirect wholly-owned subsidiary of CK Life Sciences Int'l., (Holdings) Inc., a listed entity on the Main Board of the Hong Kong Stock Exchange. Under the terms of the Exchange Agreement, upon the consummation of the Combination on October 7, 2024 (the "Closing"), in exchange for all of the outstanding common shares of Pharmagesic immediately prior to the Effective Time, the Company will issue to Sealbond, as sole shareholder of Pharmagesic, an aggregate of (A) 211,383 shares of the Company's common stock, par value $0.0001 per share ("Common Stock"), which shares shall represent a number of shares equal to no more than 19.99% of the outstanding shares of Common Stock as of immediately before the Effective Time and (B) 2,108.3854 shares of the Company's Series A Non-Voting Convertible Preferred Stock, par value $0.0001 per share ("Series A Preferred Stock") (as described below). The issuance of the shares of Common Stock and Series A Preferred Stock to Sealbond is expected to occur on October 9, 2024 and the number of shares being issued to Sealbond takes into account the effectiveness of the Reverse Stock Split described below. Each share of Series A Preferred Stock is convertible into 10,000 shares of Common Stock, subject to certain conditions described in the Exchange Agreement. The Combination is intended to be treated as a taxable exchange for U.S. federal income tax purpo

01 Completion of Acquisition or Disposition of Assets

Item 2.01 Completion of Acquisition or Disposition of Assets. On October 7, 2024, the Company completed its business combination with Sealbond. The information contained in Item 1.01 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 2.01.

02 Unregistered Sales of Equity Securities

Item 3.02 Unregistered Sales of Equity Securities. The information contained in Item 1.01 and Item 2.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02. Pursuant to the Exchange Agreement, the Company issued shares of Common Stock and Series A Preferred Stock. Such issuances were exempt from the registration requirements of the Securities Act in reliance on Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder. The shares of Common Stock and Series A Preferred Stock issued in the Combination have not been registered under the Securities Act and none of such Securities may be offered or sold in the United States absent registration or an exemption from registration under the Securities Act and any applicable state securities laws. Neither this Current Report on Form 8-K nor any of the exhibits attached hereto will constitute an offer to sell or the solicitation of an offer to buy shares of Common Stock, Series A Preferred Stock or any other securities of the Company.

03 Material Modification to Rights of Security Holders

Item 3.03 Material Modification to Rights of Security Holders. To the extent required by Item 3.03 of Form 8-K, the information contained in Item 5.03 of this Current Report on Form 8-K is incorporated by reference into this Item 3.03.

02

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. Pursuant to the Exchange Agreement, the Board (a) accepted the resignation of Richard Burch from the Board, effective as of immediately prior to the Closing on October 7, 2024; (b) appointed Alan Yu as a director of the Company and Melvin Toh as a director of the Company, in each case effective immediately after the Closing on October 7, 2024; and (c) 5 promoted Angela Walsh from her prior role of Senior Vice President of Finance to the Company's Chief Financial Officer, effective immediately upon the Closing on October 7, 2024. Greg Duncan remains as the Chief Executive Officer, Dr. R. Michael Gendreau, MD, PhD remains the Chief Medical Officer and Ralph Grosswald remains the Senior Vice President of Operations. Additionally, in connection with the appointment of Mr. Yu and Dr. Toh to the Board, the Company and CKLS entered into a letter agreement, dated October 7, 2024 (the "Letter Agreement"), pursuant to which the Company agreed to waive certain corporate opportunities. The foregoing summary of the Letter Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Letter Agreement, a copy of which is filed as Exhibit 10.3 to this Current Report on Form 8-K and is incorporated herein by reference. Appointment of Angela Walsh as Chief Financial Officer On October 4, 2024, the Board appointed Angela Walsh, age 58, as the Chief Financial Officer, effective immediately upon the Closing. Angela Walsh has served as the Company's Senior Vice President of Finance since January 1, 2021 and prior to that Ms. Walsh was the Company's Vice President of Finance since April 1, 2020. Prior to joining the Company, from 2016 to March 2020, Ms. Walsh was the Vice President of Finance for Celtaxsys, Inc., a privately held biotech company focused on developing anti-

03 Amendments to Articles of Incorporation or Bylaws: Change in Fiscal Year

Item 5.03 Amendments to Articles of Incorporation or Bylaws: Change in Fiscal Year. Certificate of Designation On October 7, 2024, the Company filed a Certificate of Designation of Preferences, Rights and Limitations of the Series A Non-Voting Convertible Preferred Stock (the "Certificate of Designation") with the Secretary of State of the State of Delaware in connection with the Combination referenced in Item 1.01 above. The Certificate of Designation provides for the designation of shares of the Series A Preferred Stock. Holders of Series A Preferred Stock are entitled to receive dividends on shares of Series A Preferred Stock (on an as-if-converted-to-Common-Stock basis, without regard to the Beneficial Ownership Limitation (as defined in the Certificate of Designation), equal to and in the same form, and in the same manner, as dividends (other than dividends on shares of the Common Stock payable in the form of Common Stock) actually paid on shares of the Common Stock when, as if such dividends (other than dividends payable in the form of Common Stock) are paid on the shares of the Common Stock; provided, however, in no event shall Holders of Series A Preferred Stock be entitled to receive the "rights" distributed pursuant to the CVR Agreement, or any amounts paid under the CVR Agreement. In addition, holders of Series A Preferred Stock shall be entitled to receive, and the Company shall pay, payment-in-kind dividends on each share of Series A Preferred Stock, accruing at a rate equal to five percent (5.0%) per annum payable in shares of Series A Preferred Stock on the date that is 180 days after the date of the original issuance of such Series A Preferred Stock or such earlier date that that such holder may convert any portion of the Series A Preferred Stock to Common Stock. Except as otherwise required by law, the Series A Preferred Stock does not have voting rights. However, as long as any shares of Series A Preferred Stock are outstanding, the Company w

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