Each CVR will entitle the holder to a pro-rata share of any consideration that may be received in connection with Wize's existing LO2A business, subject to transaction expenses and customary deductions as detailed in the CVR agreement.
Fremont, CA: Wize Pharma, a clinical-stage biopharmaceutical company focused on the treatment of ophthalmic disorders, and Cosmos Capital Limited, a leading digital infrastructure provider based in Sydney, Australia, announced that they have entered into a bid implementation agreement (BIA), whereby Wize has agreed to make an off-market takeover offer to acquire all of the outstanding shares of Cosmos, subject to the satisfaction of various closing.
"We are excited about the Wize Cosmos transaction," stated Noam Danenberg, CEO of Wize. "The Cosmos team brings a proven track record, experienced management and logistics capabilities within the Bitcoin mining industry. Consistent with our focus on maximising value for our shareholders, this transaction provides a continuing interest in our LO2A biomed activity, through the creation of a contingent value right, while providing exposure to Cosmos' Bitcoin mining operations."
James Manning, CEO and founder of Cosmos commented, "Through this transaction we are excited to be providing public markets access to our digital infrastructure business and have enjoyed working with the like-minded Wize team throughout this process. Becoming a part of a publicly traded company is central to our continued growth and will allow us to accelerate our expansion plans moving forward."
Under the terms of the BIA, Wize will commence an off-market takeover offer under applicable Australian laws to acquire all of the outstanding shares of Cosmos (the Offer) in exchange for:
1. 38.78 shares of Wize common stock and
2. 22.33 warrants (each to acquire one share of Wize common stock) for each Cosmos share (subject to a minimum tender of at least 90 percent of Cosmos' outstanding ordinary shares).
Subject to certain exceptions, the Milestone Warrants will become fully exercisable into Wize common stock provided Cosmos warrant holders retain the Wize stock issued to them until December 31, 2021.
Upon completion of the transaction, and assuming all of the holders of Cosmos shares accept the Offer, Cosmos shareholders will own approximately 81.3 percent of the outstanding common stock of the combined company (87 percent if all of the Milestone Warrants become fully vested), while Wize existing shareholders will remain the owners of approximately 16.3 percent of the outstanding common stock of the combined company (11.1 percent if all of the holders of the Milestone Warrants satisfy the December 31 Milestone and the Milestone Warrants become fully vested), each on a fully diluted basis and including warrants to be issued to Wize's financial advisor to the transaction.
Pre-closing Wize security holders will receive one contingent value right (CVR) for each share of Wize held on the record date. Each CVR will entitle the holder to a pro-rata share of any consideration that may be received in connection with Wize's existing LO2A business, subject to transaction expenses and customary deductions as detailed in the CVR agreement.
Concurrently with the execution of the BIA, Wize entered into:
• A US$3.0 million Private Investment in Public Equity (PIPE) financing from various accredited investors, including Noam Danenberg, CEO of Wize, in exchange for 25 million shares of common stock of Wize at US$0.12 per share, which financing is expected to close simultaneously with and subject to the closing of the Cosmos transaction, and
• Pre-bid acceptance agreements with several Cosmos shareholders holding 19.9 percent of the outstanding Cosmos shares who have agreed to accept the Offer.
Following the completion of the transaction, it is expected that:
• The combined company will have approximately US$5 million in cash and cash equivalents.
• Cosmos will retain its experienced management team, with Cosmos' CEO and founder James Manning assuming the role of CEO of the combined company.
• The Board of Directors of the combined company will consist of three members designated by Cosmos and one member designated by Wize.
• The combined company will seek shareholder approval to be renamed Cosmos Capital, Inc. (or similar name) and effect a reverse share split of the combined company's common stock.
The BIA provides that Cosmos will obtain an Independent Expert Report (IER) to opine on whether the transaction is fair and reasonable to the shareholders of Cosmos not associated with Wize. The IER will be provided to Cosmos shareholders with the Target Statement to be sent to Cosmos shareholders.
The Cosmos Board of Directors have carefully considered the BIA and the terms of the Offer and unanimously recommend that, in either the absence of a superior proposal or the IER concluding that the Offer is neither fair nor reasonable, Cosmos shareholders ACCEPT THE OFFER once commenced and have indicated that they will ACCEPT THE OFFER in respect of all Cosmos shares they own or control.
The closing of the transactions contemplated under the BIA and the PIPE agreements is subject to the satisfaction of certain customary closing conditions, including 90 percent minimum acceptance of the Offer by Cosmos shareholders, and is expected in mid to late first quarter of 2021. The full conditions to the Offer will be set out in the Bidder Statement, which Wize expects to dispatch to Cosmos shareholders as soon as practicable. Details of such Conditions are set out at the bottom of this press release.