ARCA biopharma Provides Update Regarding Special Dividend Amount in Connection with the Proposed Merger with Oruka Therapeutics

Rhea-AI Summary

ARCA biopharma (NASDAQ: ABIO) has updated the final amount of its special cash dividend to $1.613 per share, payable on August 28, 2024, to stockholders of record as of August 26, 2024. This dividend is part of the previously announced merger with Oruka Therapeutics. The ex-dividend date is set for August 29, 2024, due to Nasdaq rules. Trades during the due bill period (August 25-28, 2024) will have a due bill attached for the dividend, ensuring buyers receive the dividend even if the trade settles after the due bill period. The merger is expected to close on August 29, 2024, subject to conditions being met.

Positive

• Special cash dividend of $1.613 per share to be paid to stockholders
• Merger with Oruka Therapeutics progressing as planned
• ARCA's net cash expected to exceed $5,000,000 prior to merger closing

Negative

• Potential dilution of shareholder value due to merger
• Complexity of due bill process may confuse some investors

Insights

Financial Analyst

The announcement of a $1.613 per share special dividend is a significant event for ARCA biopharma investors. This dividend, representing a substantial return of capital, is tied to the company's upcoming merger with Oruka Therapeutics. The dividend amount, calculated based on ARCA's net cash exceeding $5 million, signals a strong financial position pre-merger. However, investors should note that this one-time payout may not indicate future dividend potential of the merged entity. The complex due bill process and ex-dividend date timing are important for investors to understand to ensure they receive the dividend. This payout could potentially impact ARCA's stock price post-dividend, as the share value typically adjusts downward by the dividend amount. The imminent merger closure on August 29 suggests a transformative period ahead for the company, which could bring both opportunities and uncertainties for existing shareholders.

Legal Expert

The special dividend announcement in connection with the ARCA-Oruka merger presents several legal and regulatory considerations. The dividend's structure, tied to the merger agreement and net cash calculations, demonstrates careful compliance with contractual obligations. The involvement of Nasdaq rules in setting the ex-dividend date, due to the dividend exceeding 25% of the stock price, highlights the regulatory complexities of such transactions. The detailed explanation of the due bill process serves as a protective measure, potentially mitigating risks of shareholder disputes over dividend entitlements. However, the statement that ARCA has "no obligations for either the amount of the due bill or the processing of the due bill" could be seen as a liability limitation. As the merger approaches its expected closing date, ensuring all regulatory and shareholder approval requirements are met will be important for a smooth transaction completion.

Market Research Analyst

This dividend announcement, coupled with the impending merger, signals a significant shift in ARCA biopharma's market position. The substantial special dividend of $1.613 per share could be interpreted as a vote of confidence in the company's current financial health and the potential of the merger with Oruka Therapeutics. However, it's important to consider the broader market implications. This move might be seen as a strategy to retain shareholder support for the merger, potentially indicating challenges in the biopharma sector that are driving consolidation. The timing of the dividend, just before the merger, could also impact short-term trading patterns and liquidity. Investors should closely monitor how this transaction affects ARCA's market capitalization and its position within the biopharma industry landscape post-merger. The success of this merger could set a precedent for similar moves in the sector, potentially triggering a wave of consolidations among smaller biopharma firms seeking to enhance their market competitiveness.

WESTMINSTER, Colo., Aug. 26, 2024 (GLOBE NEWSWIRE) -- ARCA biopharma, Inc. (NASDAQ: ABIO) (“ARCA”) today announced an update to the previously announced final amount of the special cash dividend (the “Special Dividend”), which will now equal $1.613 per share of ARCA’s common stock, payable on August 28, 2024, to ARCA’s stockholders of record as of August 26, 2024. The Special Dividend was declared by ARCA’s Board of Directors on August 16, 2024, in connection with the previously announced merger (the “Merger”) with Oruka Therapeutics, Inc. (“Oruka”), pursuant to the Agreement and Plan of Merger and Reorganization, dated April 3, 2024 (the “Merger Agreement”). The exact amount of the Special Dividend was calculated in accordance with the Merger Agreement and based on ARCA’s reasonable, good faith approximation of the amount by which ARCA’s net cash, as determined prior to the closing of the Merger, will exceed $5,000,000.

Because the Special Dividend exceeds 25% of ARCA’s stock price on the declaration date, it is subject to an ex-dividend date of one business day after the payment date pursuant to the rules of The Nasdaq Stock Market LLC (“Nasdaq”). Accordingly, Nasdaq has set August 29, 2024 as the ex-dividend date for the Special Dividend. In addition, ARCA understands that trades of ARCA’s common stock entered into during the due bill period beginning August 25, 2024 (the business day before the record date for the Special Dividend) and through August 28, 2024 (the “Due Bill Period”) will have a due bill attached for the Special Dividend. Due bills obligate sellers of ARCA common stock to deliver the Special Dividend to the buyer. This means that persons who purchase ARCA common stock during the Due Bill Period (even if the trade will settle after the Due Bill Period) are entitled to receive the Special Dividend, and persons who sell the stock during the Due Bill Period (even if the trade will settle after the Due Bill Period) are not entitled to the Special Dividend. Accordingly, if an investor wishes to receive the Special Dividend, the investor will need to hold the securities through and including the payment date of August 28, 2024.

The due bill obligations are settled customarily between the brokers representing the buyers and sellers of the stock. Buyers and sellers of ARCA common stock should consult with their broker before trading to ensure they understand the effect of Nasdaq’s due bill procedures. ARCA has no obligations for either the amount of the due bill or the processing of the due bill.

As previously announced, the closing of the Merger is expected to occur on August 29, 2024, assuming the satisfaction or waiver of all conditions under the Merger Agreement.

About ARCA biopharma

ARCA biopharma is dedicated to developing genetically and other targeted therapies for cardiovascular diseases through a precision medicine approach to drug development. For more information, please visit www.arcabio.com or follow the company on LinkedIn.

About Oruka Therapeutics

Oruka Therapeutics is developing novel biologics designed to set a new standard for the treatment of chronic skin diseases. Oruka’s mission is to offer patients suffering from chronic skin diseases like plaque psoriasis the greatest possible freedom from their condition by achieving high rates of complete disease clearance with dosing as infrequently as one or twice a year. Oruka is advancing a proprietary portfolio of potentially best-in-class antibodies that were engineered by Paragon Therapeutics and target the core mechanisms underlying plaque psoriasis and other dermatologic and inflammatory diseases. For more information, visit www.orukatx.com.

Forward-Looking Statements

This communication contains forward-looking statements (including within the meaning of Section 21E of the Exchange Act and Section 27A of the Securities Act) concerning ARCA, Oruka, the proposed transactions and other matters. These forward-looking statements include express or implied statements relating to the structure, timing and completion of the proposed Merger; the combined company’s listing on Nasdaq after closing of the proposed Merger; expectations regarding the ownership structure of the combined company; the expected executive officers and directors of the combined company; each company’s and the combined company’s expected cash position at the closing of the proposed Merger (including completion of Oruka’s private placement) and cash runway of the combined company; the expected contribution and payment of dividends in connection with the Merger, including the timing thereof; the future operations of the combined company; the nature, strategy and focus of the combined company; the development and commercial potential and potential benefits of any product candidates of the combined company; anticipated preclinical and clinical drug development activities and related timelines, including the expected timing for data and other clinical results; the combined company having sufficient resources to advance its pipeline candidates; and other statements that are not historical fact. The words “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions (including the negatives of these terms or variations of them) may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements are based on current expectations and beliefs concerning future developments and their potential effects. There can be no assurance that future developments affecting ARCA, Oruka, including the pre-closing private financing, or the Merger will be those that have been anticipated.

The forward-looking statements contained in this communication are based on current expectations and beliefs concerning future developments and their potential effects and therefore subject to other risks and uncertainties. These risks and uncertainties include, but are not limited to, risks associated with the possible failure to satisfy the conditions to the closing or consummation of the Merger risks associated with the potential failure to complete the financing transaction in a timely manner or at all, risks associated with the uncertainty as to the timing of the consummation of the Merger and the ability of each of ARCA and Oruka to consummate the transactions contemplated by the Merger, risks associated with ARCA’s continued listing on Nasdaq until closing of the Merger, the failure or delay in obtaining required approvals from any governmental or quasi-governmental entity necessary to consummate the Merger; the occurrence of any event, change or other circumstance or condition that could give rise to the termination of the Merger prior to the closing or consummation of the Merger, risks associated with the possible failure to realize certain anticipated benefits of the Merger, including with respect to future financial and operating results; the effect of the completion of the Merger on the combined company’s business relationships, operating results and business generally; risks associated with the combined company’s ability to manage expenses and unanticipated spending and costs that could reduce the combined company’s cash resources; risks related to the combined company’s ability to correctly estimate its operating expenses and other events; changes in capital resource requirements; risks related to the inability of the combined company to obtain sufficient additional capital to continue to advance its product candidates or its preclinical programs; the outcome of any legal proceedings that may be instituted against the combined company or any of its directors or officers related to the Merger Agreement or the transactions contemplated thereby; the ability of the combined company to obtain, maintain and protect its intellectual property rights, in particular those related to its product candidates; the combined company’s ability to advance the development of its product candidates or preclinical activities under the timelines it anticipates in planned and future clinical trials; the combined company’s ability to replicate in later clinical trials positive results found in preclinical studies and early-stage clinical trials of its product candidates; the combined company’s ability to realize the anticipated benefits of its research and development programs, strategic partnerships, licensing programs or other collaborations; regulatory requirements or developments and the combined company’s ability to obtain necessary approvals from the U.S. Food and Drug Administration or other regulatory authorities; changes to clinical trial designs and regulatory pathways; competitive responses to the Merger and changes in expected or existing competition; unexpected costs, charges or expenses resulting from the Merger; potential adverse reactions or changes to business relationships resulting from the completion of the Merger; legislative, regulatory, political and economic developments; and those risks and uncertainties and other factors more fully described in filings with the Securities and Exchange Commission (“SEC”), including reports filed on Form 10-K, 10-Q and 8-K, in other filings that ARCA makes and will make with the SEC in connection with the proposed Merger, including the Proxy Statement/Prospectus described below under “Important Additional Information About the Proposed Transaction Filed with the SEC,” and in other filings made by ARCA with the SEC from time to time and available at www.sec.gov. These forward-looking statements are based on current expectations, and with regard to the proposed transaction, are based on ARCA’s current expectations, estimates and projections about the expected date of closing of the proposed transaction and the potential benefits thereof, its business and industry, management’s beliefs and certain assumptions made by ARCA, all of which are subject to change. Such forward-looking statements are made as of the date of this release, and the parties undertake no obligation to update such statements to reflect subsequent events or circumstances, except as otherwise required by securities and other applicable law.

No Offer or Solicitation

This communication is not intended to and do not constitute (i) a solicitation of a proxy, consent or approval with respect to any securities or in respect of the proposed transactions (the “Proposed Transactions”) between ARCA and Oruka or (ii) an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities pursuant to the Proposed Transactions or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of the Securities Act of 1933, as amended, or an exemption therefrom. Subject to certain exceptions to be approved by the relevant regulators or certain facts to be ascertained, the public offer will not be made directly or indirectly, in or into any jurisdiction where to do so would constitute a violation of the laws of such jurisdiction, or by use of the mails or by any means or instrumentality (including without limitation, facsimile transmission, telephone and the internet) of interstate or foreign commerce, or any facility of a national securities exchange, of any such jurisdiction.

NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES OR DETERMINED IF THIS COMMUNICATION IS TRUTHFUL OR COMPLETE.

ARCA biopharma Investor & Media Contact:
Jeff Dekker
720.940.2122
ir@arcabio.com

Oruka Therapeutics Investor Relations Contact:
Alan Lada
650.606.7911
Alan.lada@orukatx.com

FAQ

What is the amount of ARCA biopharma's special cash dividend?

ARCA biopharma (ABIO) has announced a special cash dividend of $1.613 per share of common stock.

When is the payment date for ARCA biopharma's special dividend?

The special dividend payment date for ARCA biopharma (ABIO) is August 28, 2024.

What is the ex-dividend date for ARCA biopharma's special dividend?

The ex-dividend date for ARCA biopharma's (ABIO) special dividend is August 29, 2024, set by Nasdaq.

When is ARCA biopharma's merger with Oruka Therapeutics expected to close?

ARCA biopharma's (ABIO) merger with Oruka Therapeutics is expected to close on August 29, 2024, subject to conditions being met.

What is the due bill period for ARCA biopharma's special dividend?

The due bill period for ARCA biopharma's (ABIO) special dividend is from August 25, 2024, through August 28, 2024.