Item
1.01. Entry into a Material Definitive Agreement
Share Exchange Agreement
On December 28, 2021, Aditxt,
Inc. (the “Company”) and AiPharma Group Ltd. (“AiPharma”) entered into a Share Exchange Agreement (“Share
Exchange Agreement”) pursuant to which, among other things, the Company will: (i) acquire 9.5% of the issued and outstanding
equity interests in AiPharma in exchange for the issuance of 4,816,193 shares of common stock of Aditxt (the “Initial Purchaser
Shares”) and a cash payment of $250,000, at an initial closing, which is expected to occur on or before January 31, 2022 (the
“Initial Closing”) upon the satisfaction or waiver of certain conditions to closing (the “Initial Closing
Conditions”); and (ii) acquire the remaining 90.5% of the issued and outstanding equity interests in AiPharma in exchange for
the issuance of 39,927,974 shares of common stock of Aditxt (the “Secondary Purchaser Shares”) and a cash payment of
$250,000 at a secondary closing (the “Secondary Closing”) upon the satisfaction or waiver of certain conditions to
closing (the “Secondary Closing Conditions”).
The
Share Exchange Agreement and the transactions contemplated thereby were approved by the board of directors of Aditxt and AiPharma. Unless
expressly stated otherwise herein, capitalized terms used but not defined herein have the meanings ascribed to them in the Share Exchange
Agreement.
Representations and Warranties
The parties to the Share Exchange
Agreement have agreed to customary representations and warranties for transactions of this type. The representations and warranties of
Aditxt and AiPharma will not survive the Secondary Closing.
Covenants
The
Share Exchange Agreement includes covenants of the Company relating to, among other things, (i) operating its business in the ordinary
course, (ii) providing access and information to AiPharma, (iii) restrictions on soliciting, initiating or discussing alternative transaction
proposals with third parties and ceasing discussions regarding alternative transaction proposals, (iv) obtaining tail insurance; and (vi)
prepare a registration statement on Form S-4 with respect to the Secondary Purchaser Shares issuable under the Share Exchange Agreement,
which Form S-4 will contain a proxy statement of the Company (the “Registration Statement / Proxy Statement”) that
includes provisions for approval and/or adoption of (i) the Share Exchange Agreement and the transactions contemplated thereby, (ii) the
issuance of the Secondary Purchaser Shares, (iii) a new Company equity incentive plan, (iv) amendments and restatements of the Company’s
charter and bylaws, (v) the election of directors to the Company’s board in accordance with the Share Exchange Agreement, and (vi)
certain other proposals at a special meeting of the holders of the Company’s common stock (collectively, the “Proposals”).
The
Share Exchange Agreement includes covenants of AiPharma relating to, among other things, (i) conducting its business in the ordinary course,
(ii) providing access and information to the Company, (iii) restrictions on soliciting, initiating or discussing alternative transaction
proposals with third parties, and (iv) delivering audited and unaudited financial statements, as applicable.
Initial Closing Conditions
Mutual
The respective obligations
of each of the Company and AiPharma to consummate the Initial Closing are subject to the satisfaction or waiver, at or prior to the Initial
Closing of certain conditions, including but not limited to, the following:
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(i)
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approval
by the Company’s board of directors of the Share Exchange Agreement and the filing
of the Registration Statement / Proxy;
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(ii)
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the
Parties shall have agreed on the form of all documents and agreements which are required
to be mutually agreed prior to the Initial Closing;
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(iii)
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the
delivery of disclosure letters by each of the Parties; and
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(iv)
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the
amendment of the loan documents;
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The Company
The obligations of the Company
to consummate the Initial Closing are subject to the satisfaction or waiver, at or prior to the Initial Closing of certain conditions:,
including but not limited to, the following:
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(i)
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receipt by the Company
of a fairness opinion from its financial advisor;
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(ii)
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AiPharma shall have kept
the Company reasonably apprised with respect to the status of its negotiations with, and due diligence on, its target (the “Target
Company”) acquisition, and shall have provided the Company with copies of such documents and with such information regarding
the target company as reasonably requested by the Purchaser; and
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(iii)
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receipt by the Company of the AiPharma audited financial statements for the six months ended June 30, 2021 and the year ended December 31, 2020; and for the nine months ended September 30, 2021 and September 30, 2020.
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Initial Closing
The Initial Closing shall
take place on the second (2nd) Business Day following satisfaction or waiver (to the extent permitted by applicable law) of
each of the conditions set forth above (other than those conditions that by their nature are to be satisfied at the Initial Closing, but
subject to the fulfillment or waiver of those conditions), or such other date as agreed by the Parties; provided, that the Parties
agree that in no event shall the Initial Closing occur before January 3, 2022
Secondary Closing Conditions
Mutual
The respective obligations
of each of the Company and AiPharma to consummate the Secondary Closing are subject to the satisfaction or waiver, at or prior to the
Secondary Closing of each of the following conditions:
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(i)
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no authority of competent
jurisdiction having enacted, issued, promulgated, enforced or entered any Law or Order that is in effect and restrains, enjoins,
makes illegal or otherwise prohibits the consummation of the Share Exchange Agreement and other transactions contemplated thereby;
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(ii)
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the Registration Statement
/ Proxy Statement have been declared effective by the SEC; and
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(iii)
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approval by the Company’s
stockholders of the Proposals set forth in the Registration Statement / Proxy Statement;
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(iv)
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AiPharma shall have acquired
approximately 26% of the issued and outstanding share capital of the Target Company (the “Minimum Target Shares”)
in accordance with terms and financial structure to be agreed upon in writing between the Company and AiPharma; and
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(v)
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If AiPharma has acquired
additional shares of the Target Company in excess of the Minimum Target Shares but up to 51% of the issued and outstanding share
capital of the Target Company, such shares shall be acquired by the Company at the Secondary Closing for no additional consideration
by the Company.
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The Company
The obligations of the Company
to consummate the Secondary Closing are subject to the satisfaction or waiver, at or prior to the Secondary Closing of additional conditions,
including, but not limited to, the following:
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(i)
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AiPharma shall have duly
performed in all material respects its obligations under this Agreement required to be performed by it at or prior to the Secondary
Closing;
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(ii)
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AiPharma’s representations
and warranties being true and correct as determined in accordance with the Share Exchange Agreement; and
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(iii)
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no Material Adverse Effect
having occurred on AiPharma between the date of the Share Exchange Agreement and the Secondary Closing.
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AiPharma
The obligation of AiPharma
to consummate the Secondary Closing is subject to the satisfaction or waiver, at or prior to the Secondary Closing of additional conditions,
including, but not limited to, the following:
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(i)
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the Company shall have
duly performed in all material respects its obligations under this Agreement required to be performed by it at or prior to the Secondary
Closing;
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(ii)
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The Company’s representations
and warranties being true and correct as determined in accordance with the Share Exchange Agreement; and
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(iii)
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no Material Adverse Effect having occurred on the Company between the date of the Share Exchange Agreement and the Closing.
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Closing
The Secondary Closing shall
take place on the second (2nd) Business Day following satisfaction or waiver (to the extent permitted by applicable law) of
each of the conditions set forth in above (other than those conditions that by their nature are to be satisfied at the Secondary Closing,
but subject to the fulfillment or waiver of those conditions), or such other date as agreed by the Parties.
Termination
The Share Exchange Agreement
may be terminated at any time prior to the consummation of the Secondary Closing by mutual written consent of the Company and AiPharma.
Either the Company or AiPharma may also terminate the Share Exchange Agreement if (i) the Initial Closing has not occurred by January
31, 2022; (ii) the required vote of the Company’s common stockholders for the approval of all of the Proposals was not obtained
at the Company’s stockholder meeting; (iii) any Authority shall have issued an Order or taken any other Action, in each case that
has become final and non-appealable and that restrains, enjoins or otherwise prohibits the closing of the Transactions; or (iv) the Secondary
Closing of the Transactions has not occurred by June 30, 2022 (the “Outside Date”).
Effect of Termination
If the Share Exchange Agreement
is terminated, the Share Exchange Agreement will become void, and there will be no liability under the Share Exchange Agreement on the
part of any party thereto.
A copy of the Share Exchange
Agreement is filed with this Current Report on Form 8-K as Exhibit 2.1 and is incorporated herein by reference. The foregoing description
of the Share Exchange Agreement and the transactions contemplated thereby is incomplete and is subject to, and qualified in its entirety
by, reference to the actual agreement. The Share Exchange Agreement and other agreements described below have been included as exhibits
to this Current Report on Form 8-K to provide security holders with information regarding their terms. They are not intended to provide
any other factual information about the Company or AiPharma. In particular, the assertions embodied in representations and warranties
by the Company and AiPharma contained in the Share Exchange Agreement were made as of a specified date, are subject to important qualifications
and limitations agreed to by the parties in connection with negotiating such agreement, including being qualified by confidential information
in the disclosure letters provided by the parties in connection with the execution of the Share Exchange Agreement, and are subject to
standards of materiality applicable to the contractive parties that may differ from those applicable to security holders. The confidential
disclosures contain information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the
Share Exchange Agreement. Moreover, certain representations and warranties in the Share Exchange Agreement were used for the purpose of
allocating risk between the parties, rather than establishing matters as facts. Accordingly, security holders should not rely on the representations
and warranties in the Share Exchange Agreement as characterizations of the actual state of facts about the Company or AiPharma. Moreover,
information concerning the subject matter of the representations and warranties may change after the date of the Share Exchange Agreement,
which subsequent information may or may not be fully reflected in the Company’s public disclosures.
Amendment to Secured Credit Agreement
In
connection with the Share Exchange Agreement, on December 28, 2021, the Company entered into an amendment to the Credit Agreement (the
“Credit Agreement Amendment”) with AiPharma pursuant to which the maturity date of the loan to AiPharma was extended
to the earlier to occur of January 31, 2022, or the termination of the Share Exchange Agreement.
The
foregoing descriptions of the Credit Agreement Amendment is qualified in its entirety to the complete text of the Credit Agreement Amendment,
a copy of which will be filed as exhibits to the Company’s Annual Report on Form 10-K for the year December 31, 2021, and is intended
to provide investors and security holders with information regarding its respective terms. Such description is not intended to provide
any other factual information about the Company or AiPharma. The Credit Agreement, as amended, contains representations and warranties
that the parties to such agreements made to, and solely for the benefit of, each other. The assertions embodied in those representations
and warranties are subject, in some cases, to specified exceptions, qualifications, limitations and supplemental information, including
knowledge qualifiers and contractual standards of materiality, such as materiality qualifiers and the occurrence of a material adverse
effect, that are different from those generally applicable under federal securities law, as well as detailed information set forth in
disclosure letter provided by us in connection with signing the Credit Agreement. In addition, some representations and warranties
may have been included in the Credit Agreement for the purpose of allocating risk between the Company and AiPharma rather than to establish
matters as facts. The Credit Agreement, as amended is described in this Current Report on Form 8-K only to provide you with
information regarding their respective terms and conditions, and not to provide any other factual information regarding the Company or
its business. Accordingly, you should not rely on the representations and warranties as characterizations of the actual state of
facts, since (i) they were made only as of the date of the Credit Agreement, or a prior, specified date, (ii) in some cases
they are subject to knowledge, materiality and material adverse effect qualifiers, and (iii) they are modified in important part
by detailed information included in the disclosure letter. Finally, information concerning the subject matter of the representations
and warranties may have changed since the respective date of the Credit Agreement, as amended, which subsequent information may or may
not be fully reflected in the Company’s public disclosures.