SORRENTO THERAPEUTICS, INC. FILES (8-K) Disclosing Completion of Acquisition or Disposition of Assets, Unregistered Sale of Equity Securities, Change in Directors or Principal Officers, Regulation FD Disclosure, Financial Statements and Exhibits
(Edgar Glimpses Via Acquire Media NewsEdge) Item 2.01 Completion of Acquisition or Disposition of Assets.
On December 19, 2013 ("Effective Time"), Sorrento Therapeutics, Inc. (the
"Company") closed its previously announced merger (the "Merger") with Concortis
Biosystems, Corp. ("Concortis") pursuant to an Agreement of Merger dated
November 11, 2013 by and among the Company, Catalyst Merger Sub, Inc. ("Merger
Sub"), a wholly owned subsidiary of the Company, Concortis, Zhenwei Miao and
Gang Chen (the "Merger Agreement"). At the Effective Time, Merger Sub merged
into Concortis and the Company issued 1,331,978 shares of its common stock to
the stockholders of Concortis (the "Merger Shares"). Pursuant to the Merger
Agreement, 15% of the Merger Shares will be held by the Company for any
potential indemnification claims. In connection with the Merger, the Company
entered into a registration rights agreement (the "Registration Rights
Agreement") on December 18, 2013 with the stockholders of Concortis pursuant to
which the Company granted piggyback registration rights to such stockholders.
The foregoing description of the Registration Rights Agreement does not purport
to be complete and is qualified in its entirety by the Registration Rights
Agreement, a copy of which the Company intends to file with its Annual Report on
Form 10-K for the year ending December 31, 2013.
Item 3.02 Unregistered Sales of Equity Securities.
Reference is made to the disclosure set forth under Item 2.01 Completion of
Acquisition or Disposition of Assets of this Current Report on Form 8-K, which
disclosure is incorporated herein by reference.
The issuances of the securities described in Item 2.01 were deemed to be exempt
from registration under the Securities Act of 1933, as amended (the "Securities
Act"), in reliance upon Section 4(2) of the Securities Act (or Regulation D
promulgated thereunder) as a transaction by an issuer not involving any public
offering. Each recipient of securities: (i) represented that such recipient was
an accredited investor under Rule 501 of Regulation D, or (ii) each recipient
who was not an accredited investor, either alone or with a purchaser
representative had such knowledge and experience in financial and business
matters that they were capable of evaluating the merits and risks of the Merger,
or we reasonably believed immediately prior to the closing of the Merger that
such recipient comes within this description. In accordance with Rule 506, no
more than 35 recipients of the securities were non-accredited investors.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
In connection with the Merger, Dr. Zhenwei Miao, the former President and Chief
Scientific Officer of Concortis, was appointed Chief Technology Officer of the
At the Effective Time, we entered into an employment agreement (the "Employment
Agreement") with Dr. Miao. The Employment Agreement is for a term of 3 years
from the Merger closing (the "Term"). Under the Employment Agreement, Dr. Miao
will receive an annual salary of $250,000, a supplemental annual guaranteed cash
bonus of $450,000 on December 31 of each of the years ending 2013, 2014, 2015
and 2016, and will be eligible to participate in any incentive cash-bonus
program and equity award plan of the Company in such amounts as our board of
directors or any applicable committee thereof shall determine in its sole
discretion. The annual bonus payable under the annual incentive program will be
based on the achievement of individual and Company performance goals to be
determined in good faith by the Board or an authorized committee of the Board.
The Company has the right to terminate Dr. Miao's employment at any time with or
without "cause" or upon his death or disability (each as defined in the
Employment Agreement). Dr. Miao may resign with or without "good reason" (as
defined in the Employment Agreement) upon 30 days' written notice. Under such
circumstances, Dr. Miao will be entitled to receive any accrued but unpaid base
salary as of the date of termination or resignation, any expenses owed to him
and any amount accrued and arising from his participation in, or vested benefits
accrued under, any employee benefit plans, programs or arrangements.
The Employment Agreement for Dr. Miao also includes a provision regarding
severance. If Dr. Miao is terminated without cause or resigns for good reason,
he will also be entitled to 12 months of his then-applicable base salary paid in
a lump sum and 12 months of health care benefits continuation at Sorrento's
expense. If Dr. Miao is terminated by the Company for cause or resigns without
good reason, he shall not be entitled to further compensation. He shall have no
obligation to seek other employment and any income so earned shall not reduce
the foregoing amounts.
The Employment Agreements also contain standard confidentiality, non-competition
and non-solicitation covenants.
The foregoing description of the Employment Agreement does not purport to be
complete and is qualified in its entirety by the Employment Agreement, a copy of
which the Company intends to file with its Annual Report on Form 10-K for the
year ending December 31, 2013.
Item 7.01 Regulation FD Disclosure.
On December 19, 2013, the Company issued a press release regarding the
completion of the acquisition of Concortis. A copy of the press release is
attached hereto as Exhibit 99.1.
The information in this Item 7.01, including the exhibit, shall not be deemed
"filed" for purposes of Section 18 of the Securities Exchange Act of 1933, as
amended, or otherwise subject to the liabilities of that section.
Item 9.01 Financial Statements and Exhibits.
Financial statements and pro forma financial statements of Concortis as of and
for the periods ended December 31, 2012 and September 30, 2013 shall be filed on
an amendment to this form within 74 days of this filing.
Exhibit No. Description
2.1 Agreement of Merger by and among Sorrento Therapeutics, Inc.,
Catalyst Merger Sub, Inc., Concortis Biosystems, Corp., Zhenwei
Miao and Gang Chen dated as of November 11, 2013 (incorporated by
reference to Exhibit 2.1 to Form 8-K filed on November 14, 2013).
99.1 Press release dated December 19, 2013.
[ Back To Technology News's Homepage ]