Form 8-K First Wave BioPharma, For: Nov 30

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December 2, 2022 4:07 PM EST

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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 30, 2022

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 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§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 reported, on July 29, 2022, First Wave BioPharma, Inc., a Delaware corporation (“the Company”), entered into a binding term sheet (the “Term Sheet”) with Fortis Advisors LLC, the hired representative (in such capacity, the “Representative”) of the former stockholders of First Wave Bio, Inc. (“FWB”), settling the previously disclosed complaint filed by the Representative against the Company (the “FWB Action”) in the Court of Chancery in the State of Delaware (the “Court”) and restructuring the Company’s obligations to the former FWB shareholders.

Pursuant to the Term Sheet, the Company had previously paid the former stockholders of FWB $1.5 million in cash on July 29, 2022 (the “Upfront Payment”) and on September 9, 2022, the Company had previously paid the former stockholders of FWB an additional $1.0 million in cash (the “Second Payment”). Pursuant to the Term Sheet, in consideration of the Second Payment, the Representative caused its counsel to execute and file a stipulation of dismissal dismissing the FWB Action with prejudice with the Court. Upon payment of the Second Payment, approximately $12.5 million of fixed payment obligations owed to the former FWB shareholders was extinguished.

Pursuant to the Term Sheet, the Company and the Representative agreed to use their respective commercially reasonable efforts to negotiate a settlement agreement embodying the terms contained in the Term Sheet. Effective November 30, 2022, the Company, the Representative and certain individuals entered into a settlement agreement (the “Settlement Agreement”).

Pursuant to the Settlement Agreement, on November 30, 2022, the Company paid the final $2.0 million installment to the former stockholders of FWB as required by the Term Sheet and the Settlement Agreement (the “Final Payment”.

Under the Settlement Agreement, the former stockholders of FWB are entitled to receive future cash payments conditioned on the achievement of certain development milestones for adrulipase and to a percentage of any consideration received by the Company, its subsidiaries and/or the Company’s stockholders in the event of a license, sale or other specified transaction relating to adrulipase, subject to a cap. The former stockholders of FWB are also entitled receive a percentage of the consideration received by the Company, its subsidiaries and/or the Company’s stockholders in the event of a license, sale or other specified transaction relating to niclosamide and will retain their existing milestone payment rights with respect to niclosamide. In the event that the consideration received by the Company in connection with an adrulipase transaction or a niclosamide transaction consists of securities or other non-cash consideration or the transaction is with an affiliate of the Company, the Representative will have the right to elect either to receive payment for the former stockholders of FWB in such form of consideration or to cause the licensee or acquirer to assume the obligations described in this paragraph. In addition, the Company’s obligation to use commercially reasonable efforts to develop niclosamide will be deferred for a period of 24 months from the date of the Term Sheet.

In the event of a “Company Sale” (as defined in the Settlement Agreement), the former stockholders of FWB are entitled to receive a pro rata share of the total consideration received by the Company, its subsidiaries and/or the Company’s stockholders up to $4.0 million based on a formula set forth in the Settlement Agreement. Additionally, in the event of a “Company Sale”, if any of the milestone payments described in the preceding paragraph have not yet occurred or been paid, the obligations of the Company to make such payments upon the subsequent occurrence of such milestone events will survive the “Company Sale” and will be assumed by any successor, acquirer or surviving company in such “Company Sale”. In certain circumstances, the former stockholders of FWB have the right to treat a “Company Sale” as a sale of ardulipase or niclosamide, as applicable, and to treat the Company Sale as a sale of the related asset and the former stockholders of FWB are to receive the consideration with respect thereto described in the preceding paragraph.

The foregoing descriptions of the Term Sheet and the Settlement Agreement are summaries only, do not purport to be complete and are qualified in their entirely by reference to the full text of the Term Sheet previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K previously filed with the Securities and Exchange Commission on July 29, 2022 and 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 9.01

Financial Statements and Exhibits.

(d)	Exhibits.

Exhibit No.	Description
10.1	Form of Settlement Agreement, by and between the Representative and the Company, dated November 30, 2022. †
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

† Certain portions of this exhibit, that are not material and would likely cause competitive harm to the registrant if publicly disclosed, have been redacted pursuant to Item 601(b)(10) of Regulation S-K.

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.