Evofem Secures Investor Support for Proposed Merger through Voting Agreements

Rhea-AI Summary

Evofem Biosciences (OTCQB: EVFM) has secured voting agreements with Series E-1 stockholders and convertible noteholders to support its proposed merger with Aditxt's subsidiary Adifem. This follows Aditxt's recent $2.28 million investment in Evofem through Series F-1 convertible preferred stock, completing their total $5.0 million commitment since May 2024. The merger's closing conditions include majority shareholder approval and Aditxt raising approximately $17 million, with $15.2 million needed to satisfy Evofem's senior secured noteholder. The capital received has enabled Evofem to acquire SOLOSEC® and support Phexxi® initiatives targeting GLP-1 users.

Positive

• Secured voting agreements from key stockholders supporting the merger
• Received final $2.28M investment from Aditxt, completing $5.0M total commitment
• Successfully acquired SOLOSEC® antibiotic product

Negative

• Merger requires Aditxt to raise additional $17M to close the deal
• Risk of merger failure if $15.2M payment to senior secured noteholder isn't secured
• Trading on OTCQB market rather than major exchange

Insights

Financial Analyst

This merger deal faces significant execution risks despite securing voting agreements. The critical concern is Aditxt's ability to raise $17 million needed for closing, including $15.2 million to satisfy Evofem's senior secured noteholder. While Aditxt has completed $5 million in preferred investments since May, the substantial remaining funding requirement creates uncertainty. The senior secured noteholder's potential to block the merger adds another layer of risk.

The strategic rationale includes leveraging Aditxt's ecosystem and capital to support Evofem's recent SOLOSEC acquisition and Phexxi marketing initiatives. However, given Evofem's penny stock status and Aditxt's own financial position, the merger's completion remains highly speculative. Investors should closely monitor the upcoming proxy filing and Aditxt's funding progress.

Legal Expert

The voting agreements with Series E-1 stockholders and convertible noteholders represent a significant procedural milestone, but several material conditions remain unmet. The merger requires majority approval from combined voting power of common stock and Series E-1 holders at a meeting with quorum. Most critically, the $15.2 million senior secured note satisfaction requirement creates a potential deal-breaker if unfulfilled.

The amended preliminary proxy filing will be important for understanding complete terms and conditions. Shareholders should note the explicit disclosure that no assurance exists regarding closing condition satisfaction or ultimate deal completion, indicating substantial remaining regulatory and financial hurdles.

SAN DIEGO, Nov. 6, 2024 /PRNewswire/ -- Evofem Biosciences, Inc. (OTCQB: EVFM) ("Evofem" or the "Company") today announced it has secured voting agreements with certain of its Series E-1 stockholders and convertible noteholders to ensure they will vote in favor of the proposed merger with Aditxt, Inc. (NASDAQ: ADTX) ("Aditxt") subsidiary Adifem, Inc., under the Amended and Restated Merger Agreement, as amended (the "A&R Merger Agreement), at Evofem's upcoming Special Meeting of Stockholders (the "Meeting").

Under the voting agreements, certain holders of Evofem's Series E-1 Convertible Preferred Stock have agreed to vote the voting power of their shares, and certain holders of Evofem's Convertible Notes have agreed to vote any EVFM common stock they hold as of the record date for the Special Meeting, in favor of the merger proposal.

The voting agreements follow Aditxt's $2.28 million investment in Evofem last week through the purchase of Evofem Series F-1 convertible preferred stock (the "Preferred Investment"). This was the final investment stipulated under the A&R Merger Agreement. Aditxt has completed $5.0 million in Preferred Investments since May 2024, meeting its commitments under the A&R Merger Agreement.

"The Capital we received from Aditxt since May enabled us to acquire SOLOSEC®, the single dose oral antibiotic FDA-approved to treat bacterial vaginosis and trichomoniasis, and to fuel our initiatives to drive uptake of Phexxi® among GLP-1 users whose concomitant use of oral contraceptives puts them at risk for unplanned pregnancy," said Saundra Pelletier, CEO of Evofem. "We look forward to further support from Aditxt and its ecosystem as we work to catalyze our growth trajectory and execute our mission to improve women's lives through diversified and differentiated diagnostic, preventive, and therapeutic offerings."    

"With the support of our stockholders, including the investors who have committed to vote "for" the Merger Agreement under these voting agreements, we hope to gain approval of the Merger at our Special Meeting of Stockholders and to close shortly thereafter, assuming closing conditions are met," Ms. Pelletier added.

Closing conditions to the merger include, among others, the affirmative vote of a majority of the combined voting power of the outstanding shares of Evofem common stock and Series E-1, voting together as a single class as of the Record Date, at a meeting at which a quorum is present and Aditxt raising sufficient capital to fund its obligations at closing, which will require cash payments of approximately $17 million. This includes the approximately $15.2 million required to satisfy Evofem's senior secured noteholder; should Aditxt fail to secure these funds, Evofem's senior secured noteholder is expected to block the closing of this merger. No assurance can be provided that all conditions to closing will be obtained or satisfied or that the transaction will ultimately close.

Evofem plans to file an amended preliminary proxy related to the merger in the near future.

About Evofem Biosciences, Inc.
Evofem Biosciences is commercializing innovative products to address unmet needs in women's sexual and reproductive health. The Company's first FDA-approved product, Phexxi^® (lactic acid, citric acid and potassium bitartrate), is a hormone-free, on-demand prescription contraceptive vaginal gel. It comes in a box of 12 pre-filled applicators and is applied 0-60 minutes before each act of sex.

In July 2024 Evofem broadened its commercial offering with the acquisition of SOLOSEC® (secnidazole) 2g oral granules, an FDA-approved oral antibiotic for the treatment of two sexual health diseases: bacterial vaginosis (BV), a common vaginal infection, in females 12 years of age and older, and trichomoniasis, a common sexually transmitted infection (STI), in people 12 years of age and older. SOLOSEC provides a complete course of therapy in just one dose. 

Follow us on:

LinkedIn: https://www.linkedin.com/company/evofem
Facebook: http://www.facebook.com/Evofem
X (f/k/a Twitter): https://x.com/Evofem

Phexxi^® and SOLOSEC^® are registered trademarks of Evofem Biosciences, Inc.

Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of the safe harbor for forward-looking statements provided by Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995 including, without limitation, statements related to: the timing of the Special Meeting of Stockholders and outcome thereof; the timely conversion of notes into 4.99% of Evofem's issued and outstanding common shares by each noteholder with whom Evofem entered into the voting agreements; the ability of Aditxt to timely raise sufficient capital to close the Merger, if at all; the satisfaction of all of the conditions to closing; the lack of a third-party valuation in determining whether or not to pursue the transactions contemplated by the A&R Merger Agreement; and, the timing to close the transactions, if at all. You are cautioned not to place undue reliance on these forward-looking statements, which are current only as of the date of this press release. Each of these forward-looking statements involves risks and uncertainties. Important factors that could cause actual results to differ materially from those discussed or implied in the forward-looking statements are disclosed in Evofem's SEC filings, including its Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 27, 2024, Quarterly Report on Form 10-Q for the three months ended June 30, 2024 filed with the SEC on August 15, 2024, and any subsequent filings. All forward-looking statements are expressly qualified in their entirety by such factors. The Company does not undertake any duty to update any forward-looking statement except as required by law.

Contact
Amy Raskopf
Evofem Biosciences, Inc.
araskopf@evofem.com
(917) 673-5775

 

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SOURCE Evofem Biosciences, Inc.

FAQ

What is the total investment Aditxt has made in Evofem (EVFM) since May 2024?

Aditxt has completed $5.0 million in Preferred Investments in Evofem since May 2024, with the final $2.28 million investment made through Series F-1 convertible preferred stock.

How much funding does Aditxt need to raise to complete the merger with Evofem (EVFM)?

Aditxt needs to raise approximately $17 million to complete the merger, including $15.2 million specifically required to satisfy Evofem's senior secured noteholder.

What products did Evofem (EVFM) acquire with Aditxt's investment capital?

Evofem acquired SOLOSEC®, a single-dose oral antibiotic FDA-approved to treat bacterial vaginosis and trichomoniasis.