| | The response to Item 6 of this Schedule 13D is incorporated herein by reference.
Nova Merger
On December 30, 2024, the Issuer entered into an Agreement and Plan of Merger (the "Nova Merger Agreement"), by and among the Issuer, Grape Merger Sub I, Inc., a Delaware corporation and a wholly owned subsidiary of the Issuer ("First Merger Sub"), Grape Merger Sub II, LLC, a Delaware limited liability company and wholly owned subsidiary of the Issuer ("Second Merger Sub") and Nova Pharmaceuticals, Inc., a Delaware corporation ("Nova"), on December 30, 2024 (the "Closing"), the Issuer acquired Nova. In accordance with the Nova Merger Agreement, First Merger Sub merged with and into Nova (the "First Merger"), with Nova surviving as a wholly owned subsidiary of the Issuer. Following the First Merger and as part of the same overall transaction as the First Merger, Nova merged with and into Second Merger Sub (the "Second Merger" and, together with the First Merger, the "Merger"), with Second Merger Sub being the surviving entity of the Second Merger and renamed Nova Pharmaceuticals Operating, LLC (the "Surviving Company").
At the Closing, Emerald acquired 127,000 shares of Series B Non-Voting Convertible Preferred Stock, par value $0.001 per share ("Series B Preferred Stock"), in exchange for shares of common stock of Nova held immediately prior to the Closing, which were automatically converted into a number of shares of Series B Preferred Stock at an exchange ratio of 177.9117. Pursuant to the Nova Merger Agreement, no earlier than twelve (12) months following the Closing, but no later than eighteen (18) months following the Closing, the Issuer will submit the following matters to its stockholders at a meeting of stockholders (the "Stockholders' Meeting") for their consideration: (i) the approval of the conversion of the Series B Preferred Stock into shares of Common Stock (the "Conversion Proposal"); (ii) the approval of an amendment to the Issuer's certificate of incorporation to effect a reverse stock split and/or increase the number of authorized shares of Common Stock to such amount as determined by the Issuer's board of directors (the "Board") following the Closing; and (iii) the approval of one or more adjournments of the Stockholders' Meeting to solicit additional proxies if there are not sufficient votes cast in favor of the foregoing matters (collectively, the "Meeting Proposals"). Following stockholder approval of the Conversion Proposal, each share of Series B Preferred Stock will be convertible into 1,000 shares of Common Stock (the "Conversion Ratio") at any time at the option of the holder thereof, subject to certain limitations. The shares of Series B Preferred Stock have no expiration date. On March 17, 2026, the Surviving Company executed a Waiver of Certain Provisions of Agreement and Plan of Merger (the "Waiver"). Pursuant to the Waiver, the Surviving Company waived the Issuer's obligations under the Nova Merger Agreement to hold a meeting of stockholders to vote on, among other things, the Conversion Proposal.
December 2024 Private Placement
Also on December 30, 2024, the Issuer entered into a Securities Purchase Agreement (the "Purchase Agreement") with the purchasers named therein (the "Investors"), including Emerald. Pursuant to the Purchase Agreement, the Issuer agreed to sell to the Investors an aggregate of 44,111,260 shares of Common Stock and pre-funded warrants ("Pre-Funded Warrants") at an aggregate purchase price of $2,885,000 (the "December 2024 Private Placement"). In the December 2024 Private Placement, Emerald purchased 3,057,973 shares of Common Stock at $0.0654 per share of Common Stock for an aggregate cost of approximately $199,991. The shares of Common Stock were purchased with cash on hand. The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Purchase Agreement, which is filed as an exhibit to this Schedule 13D and is incorporated herein by reference.
Partial Mandatory Conversion of Series B Preferred Stock
On February 12, 2026, the Issuer filed a Certificate of Amendment (the "Amendment") to a Certificate of Designation of Preferences, Rights and Limitations of Series B Preferred Stock (the "Certificate of Designation") with the Secretary of State of Delaware. The Amendment provides that, in the sole discretion of the Board, the Issuer may elect to convert, in whole or in part, outstanding shares of Series B Preferred Stock into a number of shares of Common Stock calculated based on the Conversion Ratio (a "Mandatory Conversion"). On April 6, 2026, the Issuer provided Emerald with notice of a partial Mandatory Conversion of Series B Preferred Stock effective April 7, 2026 (the "Partial Mandatory Conversion"). In connection with the Partial Mandatory Conversion, 37,158.1873807108 shares of Series B Preferred Stock held by Emerald were converted into 37,158,187 shares of Common Stock. In lieu of fractional shares to which Emerald was entitled, the Company is required to pay Emerald an amount of cash equal to such fraction multiplied by the closing price of a share of Common Stock on the applicable Trading Market (as defined in the Certificate of Designation) on the date of the Partial Mandatory Conversion, in accordance with Section 6.4.6 of the Certificate of Designation.
Following the Partial Mandatory Conversion, the Emerald now holds 40,216,160 shares of Common Stock and 20,813.8186192892 shares of Series B Preferred Stock.
Stockholder Support Agreement
On April 14, 2026, the Issuer entered into an Agreement and Plan of Merger (the "Obsidian Merger Agreement") with Obsidian Therapeutics, Inc., a Delaware corporation ("Obsidian"), Gazelle Parent, Inc., a Delaware corporation ("Parent"), Onyx MergerSub, Inc., a Delaware corporation and a direct, wholly owned subsidiary of Parent ("Obsidian Merger Sub"), and Gazelle Merger Subsidiary, Inc., a Delaware corporation and a direct, wholly owned subsidiary of Parent ("Galera Merger Sub").
Pursuant to the Obsidian Merger Agreement, and upon the terms and subject to the satisfaction of the conditions described therein, the Issuer will be merged with and into Galera Merger Sub, with the Issuer surviving as a wholly owned subsidiary of Parent (the "Galera Merger"), and Obsidian will be merged with and into Obsidian Merger Sub, with Obsidian surviving as a wholly owned subsidiary of Parent (the "Obsidian Merger" and, together with the Galera Merger, the "Mergers" and, together with all of the other transactions contemplated by the Obsidian Merger Agreement, the "Contemplated Transactions").
Concurrently with the execution of the Obsidian Merger Agreement, the executive officers and directors and certain other stockholders of the Issuer, including Emerald, holding an aggregate of approximately 51.1% of the Issuer's outstanding capital stock entered into support agreements (the "Stockholder Support Agreements") in favor of Obsidian, providing among other things, that such officers, directors and stockholders will vote all of their eligible shares of Issuer capital stock, among other things: (i) in favor of approving the Mergers, the Galera Stockholder Written Consent (as defined in the Obsidian Merger Agreement) and the other actions contemplated by the Obsidian Merger Agreement and (ii) against any proposal made in opposition to, or in competition with, the Obsidian Merger Agreement or the Mergers. The foregoing description of the Stockholder Support Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the form of Stockholder Support Agreement, which is filed as an exhibit to this Schedule 13D and is incorporated herein by reference.
The Reporting Persons acquired the securities reported herein for investment purposes. The Reporting Persons have no present plans or proposals that relate to or would result in any of the matters set forth in subparagraphs (a) - (j) of Item 4 of Schedule 13D.
The Reporting Persons intend to review their investment in the Issuer's Common Stock (or derivatives with respect thereto) on a continuing basis.
Depending on various factors including, without limitation, the Issuer's financial position, the price of the Issuer's Common Stock, conditions in the securities markets and general economic and industry conditions, the Reporting Persons may in the future take such actions with respect to their investment in the Issuer as they deem appropriate, including, without limitation, (i) purchasing additional shares of Common Stock (or derivatives with respect thereto) in the open market, in privately negotiated transactions or otherwise; (ii) selling all or a portion of the shares of Common Stock (or derivatives with respect thereto) now beneficially owned or hereafter acquired by the Reporting Persons; or taking any other action with respect to the Issuer or any of its securities in any manner permitted by law or with respect to any and all matters referred to in paragraphs (a) through (j), inclusive, of the instructions to Item 4 of Schedule 13D.
Other than as described herein, the Reporting Persons do not have any present plans or proposals that relate to or that would result in any of the events or matters described in paragraphs (a) through (j), inclusive, of the instructions to Item 4 of Schedule 13D, although, subject to the agreements described herein and applicable legal requirements, the Reporting Persons may, at any time and from time to time, may review, reconsider and change their position or change their purpose or develop such plans. |
