On August 20, 2019, Vical Incorporated (the "Company") reported that it entered into an amendment (the "Amendment") with Brickell Biotech, Inc., a Delaware corporation and clinical-stage medical dermatology company ("Brickell"), and Victory Subsidiary, Inc., a Delaware corporation and wholly owned subsidiary of the Company ("Merger Sub"), to the Agreement and Plan of Merger and Reorganization dated as of June 2, 2019 by and among the Company, Brickell and Merger Sub (the "Merger Agreement") (Filing, 8-K, Vical, AUG 21, 2019, View Source [SID1234538907]). Pursuant to the Merger Agreement, as amended, and upon the terms and subject to the satisfaction of the conditions described in the Merger Agreement, as amended, Merger Sub will be merged with and into Brickell (the "Merger"), with Brickell surviving the Merger as a wholly owned subsidiary of the Company.

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Pursuant to the Amendment, the parties revised the minimum Brickell net working capital closing condition from -$11.5 million to -$14.3 million, revised the Brickell valuation from $60.0 million to $50.2 million, and revised the range of Brickell closing net working capital, outside of which there will be a dollar-for-dollar adjustment to the Brickell valuation, to -$14.8 million to -$13.8 million and fixed the assumed share price for purposes of applying the treasury stock method to calculate the number of Brickell and Vical outstanding shares at $0.79 and $1.35, respectively. The amended Brickell valuation results in an ownership split between Brickell and Vical stockholders of approximately 56% and 44%, respectively (on a fully diluted basis using the treasury stock method in instances other than with respect to the NovaQuest Warrants (as defined in the Merger Agreement) and certain equity issuances by Brickell following the signing of the Merger Agreement and prior to the completion of the Merger), or 51% and 49%, respectively (on a fully diluted basis using the treasury stock method), subject to further adjustment pursuant to the terms of the Merger Agreement, as amended by the Amendment. Other than as set forth in the Amendment, the terms of the Merger Agreement are unchanged.