Tenzing Acquisition Corp., a special purpose acquisition company incorporated in the British Virgin Islands (“Tenzing”) (NASDAQ: TZAC), and Reviva Pharmaceuticals Inc., a Delaware corporation (“Reviva”) and a California-based clinical stage pharmaceutical company developing therapies that address unmet medical needs in the areas of central nervous system, cardiovascular, metabolic, and inflammatory diseases, announced today they have entered into a definitive agreement and plan of merger (the “Merger Agreement”) for a business combination transaction resulting in a total post-money equity value of the combined company of approximately $119 million assuming $34 million stays in Tenzing’s trust account in connection with the closing, and assuming no other equity issuances by Tenzing.
As a result of executing the Merger Agreement, in accordance with the amendment to Tenzing’s Amended and Restated Memorandum and Articles of Association that was approved by Tenzing’s shareholders at a special meeting on May 21, 2020, Tenzing’s sponsor (or its designees) will have the option, but not the obligation, to extend Tenzing’s deadline to consummate its initial business combination from July 27, 2020 for up to two monthly periods to September 28, 2020, by depositing as a loan, an additional $0.033 per public share per month into Tenzing’s trust account in connection with each such additional monthly extension. Tenzing’s sponsor had informed Tenzing that it intends prior to July 27, 2020 to exercise such right to extend such deadline by one month.
“We are thrilled to have the opportunity to partner with Dr. Bhat and Reviva. We believe Brilaroxazine (RP5063), which demonstrated efficacy and safety in a global phase 2 clinical study for schizophrenia and schizoaffective disorders, is a compelling asset which we expect will become a cornerstone therapy for treating many diseases in the central nervous system (CNS) area,” said Parag Saxena, Chairman of the Board of Directors of Tenzing. Brilaroxazine also showed efficacy for pulmonary arterial hypertension (“PAH”) and idiopathic pulmonary fibrosis (“IPF”) compared to the approved drugs in proven translational models. Brilaroxazine is ready for Phase 3 clinical study in Schizophrenia, and Phase 2 studies in PAH and IPF. It has also recently gained Orphan Drug Designation from FDA for the treatment of PAH and IPF.
“The execution of the Merger Agreement presents an important milestone and represents a unique opportunity to finance and advance the clinical development of Reviva’s innovative therapies, which may improve treatment options for neuropsychiatric and respiratory diseases with high unmet medical needs,” said Laxminarayan Bhat, Ph.D., Founder, President and CEO of Reviva.
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In connection with the closing of the transactions contemplated by the Merger Agreement (the “Transactions”), Tenzing will reincorporate from the British Virgin Islands to the State of Delaware, and a newly formed Delaware subsidiary of Tenzing will merge with and into Reviva, with Reviva continuing as the surviving corporation and a wholly-owned subsidiary of Tenzing. Reviva’s stockholders will receive $62.4 million of Tenzing common stock (with each Tenzing share valued at the redemption price to be paid to Tenzing’s public shareholders who redeem their shares in connection with the closing of the business combination), and Reviva’s outstanding options and warrants to acquire capital stock of Reviva will be assumed by Tenzing. Additionally, the former Reviva stockholders will have the ability to earn an additional one million shares of Tenzing common stock after the closing if certain stock price and product development milestones are met within three years after the closing. The closing is subject to certain conditions and is currently expected to occur in September 2020 or the fourth quarter of 2020. The Transactions are not subject to any minimum cash requirements for Tenzing. Assuming no redemptions by Tenzing shareholders and assuming no other equity issuances by Tenzing, immediately following the closing, the pre-closing shareholders of Reviva and Tenzing are expected to hold approximately 52% and 48% of the issued and outstanding shares of the combined company, respectively. All cash remaining in Tenzing at the closing after paying off transaction expenses and Tenzing liabilities is expected to be used for Reviva’s growth and development.
Following the closing of the Transactions, the public company will be led by Reviva’s management team, with Dr. Laxminarayan Bhat as Chief Executive Officer, and Marc Cantillon, MD, as the Chief Medical Officer. Parag Saxena will continue to serve as the Chairman of the Board of Directors post-closing.
Source: Biospace