Item 1.01 Entry into a Material Definitive Agreement.
First Amendment to Agreement and Plan of Merger
As previously disclosed, on May 17, 2020, Neurotrope, Inc., a Nevada corporation
("Neurotrope") entered into an Agreement and Plan of Merger (the "Merger
Agreement") with Petros Pharmaceuticals, Inc., a Delaware corporation formed for
the purposes of effecting transactions contemplated by the Merger Agreement
("Petros"), PM Merger Sub 1, LLC, a Delaware limited liability company and a
wholly-owned subsidiary of Petros ("Merger Sub 1"), PN Merger Sub 2, Inc., a
Delaware corporation and a wholly-owned subsidiary of Petros ("Merger Sub 2"),
and Metuchen Pharmaceuticals LLC, a Delaware limited liability company
("Metuchen"). The Merger Agreement provides for (1) the merger of Merger Sub 1,
with and into Metuchen, with Metuchen surviving as a wholly-owned subsidiary of
Petros (the "Metuchen Merger") and (2) the merger of Merger Sub 2 with and into
Neurotrope, with Neurotrope surviving as a wholly-owned subsidiary of Petros
(the "Neurotrope Merger" and together with the Metuchen Merger, the "Mergers").
On July 23, 2020, Neurotrope, Petros, Merger Sub 1, Merger Sub 2 and Metuchen
entered into a First Amendment to the Merger Agreement (the "Amendment") which
provides, among other things, that the aggregate number of shares of Petros
common stock to be issued to the Metuchen securityholders in the Mergers is
82,587,877. In addition, upon the achievement of certain targets set forth in
the Amendment, Petros will deposit earnout payments (the "Earnout Payments")
with the exchange agent for distribution to each unitholder of Metuchen prior to
the closing of the Metuchen Merger in accordance with such unitholder's earnout
pro rata percentage as follows:
· If at any time following the closing of the Metuchen Merger and prior to July
31, 2022, the closing price per share of Petros common stock is:
o (i) greater than or equal to $1.8125 for a period of twenty (20) consecutive
trading days, then the earnout payment will be equal to 3,330,156 shares of
Petros common stock ("First Milestone Earnout Payment");
o (ii) greater than or equal to $2.175 for a period of twenty (20) consecutive
trading days, then the earnout payment will be equal to 3,330,156 shares of
Petros common stock (the "Second Milestone Earnout Payment");
o (iii) greater than or equal to $2.5375 for a period of twenty (20) consecutive
trading days, then the earnout payment will be equal to 3,330,156 shares of
Petros common stock (the "Third Milestone Earnout Payment"); and
o (iv) greater than or equal to $2.90 for a period of twenty (20) consecutive
trading days, then the earnout payment will be equal to 3,330,156 shares of
Petros common stock (the "Final Milestone Earnout Payment").
Each Milestone Earnout Payment is only achievable and payable one time and no
further payments with respect to any individual Milestone Earnout Payment will
be achievable following its initial achievement. In no event will the sum of the
First Milestone Earnout Payment, the Second Milestone Earnout Payment, the Third
Milestone Earnout Payment and the Final Milestone Earnout Payment be greater
than 13,320,624 shares of Petros common stock. Each reference to share prices
and Petros common stock will be subject to adjustment for reverse and stock
forward splits, stock dividends, stock combinations and other similar
transaction of the Petros common stock that occur after the date of the Merger
Agreement.
The Amendment also amends and restates Section 9.2 of the Merger Agreement to
provide that for so long as at least one of Josh Silverman, Bruce Bernstein,
Charles Ryan and Ivan Gergel (the "Continuing Neurotrope Directors") is serving
on the board of directors of Petros, the Continuing Neurotrope Directors will
have sole authority on behalf of Petros to approve any amendment to the Merger
Agreement on behalf of the board of directors of Petros. The Amendment
additionally amends and restates certain defined terms in the Merger Agreement,
including the definition of "Excess Cash" to adjust for costs associated with
Charles Ryan's employment and assistance to Metuchen and certain investor
relations and public relations costs. Excess Cash relates to the amount of cash
to be distributed to Neurotrope Bioscience, Inc., a wholly-owned subsidiary of
Neurotrope ("Neurotrope Bioscience"), in connection with the previously
announced intended spin-off of Neurotrope Bioscience concurrent with the closing
of the Mergers.
The foregoing description of the Amendment does not purport to be complete and
is qualified in its entirety by reference to the Agreement, which is attached as
Exhibit 2.1 to this Current Report on Form 8-K and is incorporated in its
entirety into this Item 1.01 by reference.
Employee Lease Agreement
In connection with the entry into the Amendment, on July 23, 2020, Neurotrope,
Neurotrope Bioscience and Metuchen entered into an Employee Lease Agreement (the
"Employee Lease Agreement"), pursuant to which Neurotrope and Neurotrope
Bioscience agreed to lease the services of Dr. Charles Ryan, Chief Executive
Officer of Neurotrope, to Metuchen prior to the closing of the Metuchen Merger.
Pursuant to the terms of the Employee Lease Agreement, Dr. Ryan will devote no
more than 75% of his working time performing services to Metuchen and Metuchen
will pay 75% of the costs associated with Dr. Ryan's employment from the period
beginning on June 1, 2020 through the closing of the Metuchen Merger, including
but not limited to, the costs for all compensation and benefits paid to, for or
on behalf Dr. Ryan (the "Fees"). The Fees pursuant to the Employee Lease
Agreement will act to reduce the amount of cash that is retained by Petros
following the closing of the Metuchen Merger, provided, however, that if the
Mergers are not consummated and the Merger Agreement is terminated pursuant to
its terms, Metuchen will not be required to pay any of the Fees.
The foregoing description of the Employee Lease Agreement does not purport to be
complete and is qualified in its entirety by reference to the Employee Lease
Agreement, which is attached as Exhibit 10.1 to this Current Report on Form 8-K
and is incorporated in its entirety into this Item 1.01 by reference.
Forward-Looking Statements
This communication contains forward-looking statements (including within the
meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and
Section 27A of the Securities Act of 1933, as amended) concerning Neurotrope,
Metuchen, the proposed transactions and other matters. These statements may
discuss goals, intentions and expectations as to future plans, trends, events,
results of operations or financial condition, or otherwise, based on current
beliefs of the management of Neurotrope, as well as assumptions made by, and
information currently available to, management. Forward-looking statements
generally include statements that are predictive in nature and depend upon or
refer to future events or conditions, and include words such as "may," "will,"
"should," "would," "expect," "anticipate," "plan," "likely," "believe,"
"estimate," "project," "intend," and other similar expressions. Statements that
are not historical facts are forward-looking statements. Forward-looking
statements are based on current beliefs and assumptions that are subject to
risks and uncertainties and are not guarantees of future performance. Actual
results could differ materially from those contained in any forward-looking
statement as a result of various factors, including, without limitation: the
risk that the conditions to the closing of the transactions are not satisfied,
including the failure to obtain stockholder approval for the transactions in a
timely manner or at all; uncertainties as to the timing of the consummation of
the Mergers and the spin-off of Neurotrope's wholly-owned subsidiary, Neurotrope
Bioscience, Inc., and the ability of each of Petros, Neurotrope and Metuchen to
consummate the transactions; risks related to Petros' initial listing on The
Nasdaq Capital Market at the closing of the proposed transaction; risks related
to Neurotrope's ability to correctly estimate its operating expenses and its
expenses associated with the transaction; the ability of Neurotrope or Metuchen
to protect their respective intellectual property rights; competitive responses
to the transaction; unexpected costs, charges or expenses resulting from the
transaction; potential adverse reactions or changes to business relationships
resulting from the announcement or completion of the transaction; and
legislative, regulatory, political and economic developments. The foregoing
review of important factors that could cause actual events to differ from
expectations should not be construed as exhaustive and should be read in
conjunction with statements that are included herein and elsewhere, including
the risk factors included in Neurotrope's most recent Annual Report on
Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed
with the Securities Exchange Commission (the "SEC"). Neurotrope can give no
assurance that the conditions to the transaction will be satisfied. Except as
required by applicable law, Neurotrope undertakes no obligation to revise or
update any forward-looking statement, or to make any other forward-looking
statements, whether as a result of new information, future events or otherwise.
No Offer or Solicitation
This communication is not intended to and does not constitute an offer to sell
or the solicitation of an offer to subscribe for or buy or an invitation to
purchase or subscribe for any securities or the solicitation of any vote in any
jurisdiction pursuant to the proposed transaction or otherwise, nor shall there
be any sale, issuance or transfer of securities in any jurisdiction in
contravention of applicable law. No offer of securities shall be made except by
means of a prospectus meeting the requirements of the Securities Act of 1933, as
amended. Subject to certain exceptions to be approved by the relevant regulators
or certain facts to be ascertained, the public offer will not be made directly
or indirectly, in or into any jurisdiction where to do so would constitute a
violation of the laws of such jurisdiction, or by use of the mails or by any
means or instrumentality (including without limitation, facsimile transmission,
telephone and the internet) of interstate or foreign commerce, or any facility
of a national securities exchange, of any such jurisdiction.
Important Additional Information Will be Filed with the SEC
In connection with the proposed transaction among Petros, Neurotrope and
Metuchen, Petros intends to file relevant materials with the SEC, including a
registration statement that will contain a proxy statement and
prospectus. NEUROTROPE URGES INVESTORS AND STOCKHOLDERS TO READ THESE MATERIALS
CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT PETROS, NEUROTROPE, METUCHEN, THE PROPOSED
TRANSACTIONS AND RELATED MATTERS. Investors and shareholders will be able to
obtain free copies of the proxy statement, prospectus and other documents filed
by Petros and Neurotrope with the SEC (when they become available) through the
website maintained by the SEC at www.sec.gov. In addition, investors and
shareholders will be able to obtain free copies of the proxy statement,
prospectus and other documents filed by Petros and Neurotrope with the SEC by
contacting Investor Relations by mail at Neurotrope, Inc., Attn: Investor
Relations, 1185 Avenue of the Americas, 3rd Floor, New York, New York 10036.
Investors and stockholders are urged to read the proxy statement, prospectus and
the other relevant materials when they become available before making any voting
or investment decision with respect to the proposed transaction.
Participants in the Solicitation
Petros, Neurotrope and Metuchen, and each of their respective directors and
executive officers and certain of their other members of management and
employees, may be deemed to be participants in the solicitation of proxies in
connection with the proposed transaction. Information about Neurotrope's
directors and executive officers is included in Neurotrope's Annual Report on
Form 10-K for the year ended December 31, 2019, filed with the SEC on March 13,
2020. Additional information regarding these persons and their interests in the
transaction will be included in the proxy statement relating to the transactions
when it is filed with the SEC. These documents can be obtained free of charge
from the sources indicated above.
Item 9.01 Financial Statements and Exhibits
The following exhibits are filed herewith:
(d) Exhibits.
Exhibit No. Description
2.1 First Amendment to Agreement and Plan of Merger, dated as of July
23, 2020, by and between Petros Pharmaceuticals, Inc., PM Merger Sub
1, LLC, PN Merger Sub 2, Inc., Neurotrope, Inc. and Metuchen
Pharmaceuticals, Inc.
10.1 Employee Lease Agreement, dated as of July 23, 2020, by and between
Neurotrope, Inc., Neurotrope Bioscience, Inc. and Metuchen
Pharmaceuticals, LLC.
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