On August 16, 2019 Spherix Incorporated (Nasdaq: SPEX) ("Spherix" or the "Company") reported that the Company filed its Form-10Q for the period ended March 31, 2019, which showed total assets of $11,937,000.00 and liabilities of $982,000.00, with 2,010,074 shares of common stock outstanding (Press release, Spherix, AUG 16, 2019, View Source [SID1234538985]).
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In addition, the Company announced a restructuring of the terms of its proposed merger with CBM BioPharma, Inc. (CBM), a Delaware corporation. In lieu of the previously announced merger, the Company announced the terms of an Asset Purchase Agreement with CBM, whereby the Company purchased substantially all of CBM’s assets including, among other things, a license agreement, university contracts, and contracts with a Chief Scientific Officer, as well as a Scientific advisory board. The revised agreement is significantly less dilutive to Spherix shareholders, as Spherix is paying $8,000,000.00 to CBM in total compensation, as opposed to the previously announced $16,500,000.00, as more fully set forth in the Company’s filings. The acquisition of CBM’s assets is pending shareholder approval.
In addition, the Company announced that it purchased a 20% shareholder’s stake in CBM along with certain interests in DatChat, Inc. Spherix was successful in acquiring these interests in CBM at a substantial discount to CBM’s valuation. The 20% shareholder stake in CBM will give Spherix the ability to participate in any dividends declared by CBM in the future.
Mr. Anthony Hayes, CEO of Spherix stated, "The revised negotiated terms with CBM BioPharma in the Asset Purchase Agreement will introduce valuable assets into the Spherix family. The new agreement will be less dilutive to Spherix shareholders. I am also pleased to note that CBM has received some early, favorable correspondence from the Patent Office about its University of Texas patent applications. We will provide additional information as it comes available, but it is certainly a positive development for CBM."
"Post-closing, Spherix shareholders will still own a majority interest in the Company. Further, Spherix’s 20% ownership in CBM is an accretive benefit to Spherix shareholders and by having an ownership interest in CBM, Spherix will participate in any dividend distributions made by CBM in the future. This may include cash dividends that might result from the future sale of Spherix stock. We look forward to sharing additional information with our shareholders about the proposed asset purchase in the upcoming weeks through both investor outreach and our upcoming SEC filings."
In addition to the CBM announcement, the Company’s Board of Directors under authority granted by the Company’s stockholders at the Company’s 2019 Annual Meeting, approved a reverse stock split of its common shares at a ratio of 1-for-4.25. The reverse stock split became effective on May 10, 2019, when the shares began trading on the split-adjusted basis on the Nasdaq Capital Market, under the Company’s existing trading symbol "SPEX".
Further information about the proposed asset purchase agreement and reverse stock split are provided in the Company’s Form 10-Q which was filed on May 15, 2019, with the Securities and Exchange Commission.