Chardan Healthcare announces merger agreement with BiomX
Chardan Healthcare Acquisition announced that it has entered into a definitive agreement for a business combination with BiomX, a microbiome company developing both natural and engineered phage therapies. Assuming no redemption of CHAC shareholders, the combined company will have an initial market capitalization of approximately $254M. Upon closing of the transaction, it is expected that CHAC will be renamed BiomX and remain on the NYSE American Stock Exchange, listed under a new ticker symbol. CHAC has entered into a mix of commitments including purchase and sale, backstop, and voting agreements with BiomX and with investors so that the $50M minimum closing condition for the transaction has been satisfied prior to today's announcement. CHAC raised $70M in its IPO which is now held in a trust account. Under the terms of the proposed transaction announced today, CHAC will issue 16.625M shares and vested securities to current securityholders of BiomX. Certain BiomX shareholders may, subject to the terms of the investment agreements, receive up to an additional 6M CHAC shares: 2M shares if the share price exceeds $16.50 by FY21, an additional 2M shares if the share price exceeds $22.75 by FY23, and an additional 2M shares if the share price exceeds $29.00 by FY25. After giving effect to the investor transactions being undertaken in order to meet the minimum cash condition, and assuming no redemption from CHAC shareholders, it is estimated that the current securityholders of BiomX will own approximately 73% of the issued and outstanding vested securities in the combined company at closing. Post-closing, Mr. Solomon and three current BiomX directors will join Mr. Grossman and Dr. Amusa from CHAC on the seven-person board. An additional board member will be designated by BiomX. The respective boards of both CHAC and BiomX have approved the proposed transaction. Completion of the transaction is expected in October.