On February 7, 2024 QSAM Biosciences Inc. (OTCQB: QSAM) ("QSAM or the "Company") reported that it has signed a definitive Agreement and Plan of Merger (the "Agreement") providing for the acquisition of the Company by Telix Pharmaceuticals Limited (ASX: TLX) ("Telix") (Press release, QSAM Biosciences, FEB 7, 2024, View Source [SID1234639942]).

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Pursuant to the Agreement, QSAM stockholders will receive (i) $33.1 million in Telix ordinary shares ("Telix Shares") or cash, less an adjustment amount equal to QSAM’s indebtedness and payables as of the merger closing (the "Closing Consideration"), and (ii) contingent value rights ("CVRs") to receive future payments of up to $90 million upon the achievement of four clinical and commercial milestones within ten years of closing.

Prior to closing the merger, QSAM will effect a reverse stock split of its common stock in a ratio between 1:1000 and 1:2000. Each whole share of QSAM common stock outstanding after the reverse split will receive Telix Shares. Any remaining fractional shares of QSAM common stock resulting from the reverse split will be exchanged for an equivalent value in cash on a per share basis based on the per share price of Telix Shares as of the signing date of the Agreement. All QSAM stockholders will receive one CVR for each QSAM common share held prior to the reverse split.

Telix Shares issued to QSAM stockholders will not be registered under the Securities Act of 1933, as amended (the "Securities Act"), but will be issued pursuant an exemption to the registration requirements thereunder, and more specifically, Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D; and as a result, will be subject to resale restrictions under Rule 144 of the Securities Act.

QSAM stockholders representing greater than a majority of the total voting stock of the Company have already approved the merger. Closing, however, is subject to various conditions set forth in the Agreement including, among others, the filing of a definitive information statement pursuant to Regulation 14C of the Securities Exchange Act of 1934, as amended (the "Information Statement"). The merger cannot be closed until 20 days after the mailing of the Information Statement to QSAM stockholders.

Dr. C. Richard Piazza, QSAM’s Executive Chairman and co-Founder, stated, "The signing of our Merger Agreement with Telix marks a major milestone for QSAM and our shareholders. We are thrilled to advance this transaction to signing and expect to complete the transaction in the first half of 2024, subject to the timing of our Information Statement and the satisfaction of customary closing conditions. We believe strongly that Telix is the right partner to advance Samarium-153-DOTMP through clinical trials and give this important technology the best chance to improve the lives of patients suffering from bone cancer. We are equally excited for our shareholders, as we believe this is a great outcome for their investments."

Dr Christian Behrenbruch, Managing Director and Group CEO of Telix said, "The acquisition of QSAM provides Telix with an additional near-term therapeutic pipeline asset, further differentiating our innovation position in radiopharmaceuticals and building depth in Telix’s key disease focus areas of urological and musculoskeletal oncology. Samarium is a highly optimal radionuclide for treating bone metastases, and the combination of Orphan Drug Designation and Rare Pediatric Disease Designation status with Telix’s demonstrated experience in pharmacy-based cold-kit distribution has strong potential for a rapid pathway to commercialisation of this asset."

Additional details about the Agreement, the CVRs and other material aspects of the merger and agreements and transactions contemplated by the merger will be provided in the Company’s Form 8-K to be filed subsequently with the SEC.