NLS Pharmaceutics, Kadimastem enter definitive merger agreement

NLS Pharmaceutics (NLSP) and Kadimastem announced that they have entered into a definitive merger agreement to combine the two companies to focus on advancing NLS’ promising, first-in class Dual Orexin Agonist platform and Kadimastem’s allogenic cell therapy program with its clinical assets. Following the closing of the transactions contemplated by the Merger Agreement, NLS intends to divest its other legacy assets, and the net proceeds of any such disposition, after deducting certain costs, fees, and expenses as set forth in a contingent value agreement, will be distributed to NLS’s shareholders and warrant holders, subject to the terms of the Merger Agreement and the CVR Agreement. At the Closing, pursuant to the terms of the Merger Agreement, NLS will issue shares of its common stock to Kadimastem’s shareholders based on an initial target fully diluted share split, post transaction, of 85% to Kadimastem stakeholders and 15% to NLS stakeholders, in exchange for 100% of Kadimastem’s issued and outstanding shares. The target fully diluted share split of 85% / 15% is subject to adjustment pursuant to the terms of the Merger Agreement, including as a result of estimated closing cash of NLS and Kadimastem and estimated closing indebtedness of NLS. Based on the cash balance of NLS following its most recent successful financing transaction, the parties currently estimate the fully diluted share split at the Closing will be 80% to Kadimastem stakeholders and 20% to NLS stakeholders. The boards of directors of Kadimastem and NLS have unanimously approved this transaction and expect it to close in January 2025, pending approval of each of NLS’ and Kadimastem’s shareholders, as well as other customary closing conditions, including Nasdaq approval.