공고 • Feb 16
Phoenix Biotech Acquisition Corp. (NasdaqGM:PBAX) completed the acquisition of CERo Therapeutics, Inc.
Phoenix Biotech Acquisition Corp. (NasdaqGM:PBAX) executed the letter of intent to acquire CERo Therapeutics, Inc. on January 25, 2023. Phoenix Biotech Acquisition Corp. (NasdaqGM:PBAX) CERo Therapeutics, Inc. entered into a definitive business combination agreement to acquire CERo Therapeutics, Inc. for $86.9 million on June 4, 2023. At the effective time of the Business Combination (the “ Effective Time ”), (i) each outstanding share of CERo common stock, par value $0.0001 per share (the “ CERo common stock ”) will be cancelled and converted into (a) the right to receive a number of shares of PBAX Class A common stock, par value $0.0001 per share (“ Class A common stock ”), equal to $50,000,000, minus the Aggregate Liquidation Preference (as defined in the Business Combination Agreement), divided by the Fully Diluted Company Capitalization (as defined in the Business Combination Agreement), divided by $10.00 (the “ Exchange Ratio ”) and (b) the right to receive a portion of up to 1,200,000 additional shares of Class A common stock if certain trading price hurdles are achieved or a Change of Control (as defined in the Business Combination Agreement) occurs within four years after the Closing (“ Earnout Shares ”); (ii) each outstanding option to purchase CERo common stock (each, a “ CERo option ”) will be converted into an option to purchase a number of shares of Class A common stock, equal to (A) the number of shares of CERo common stock subject to such option immediately prior to the Effective Time, multiplied by (B) the Exchange Ratio, at an exercise price per share equal to the current exercise price per share for such option divided by the Exchange Ratio; in each case, rounded down to the nearest whole share, and rounded up to the nearest whole cent in the case of the exercise price of the CERo options; (iii) each outstanding share of CERo preferred stock, par value $0.0001 per share (the “ CERo preferred stock ”), will be converted into a number of shares of Class A common stock, equal to the number of shares of Class A common stock obtained by dividing the liquidation preference thereof by $10.00 and the contingent right to receive such holder’s Earn-Out Pro Rata Portion (as defined in the Business Combination Agreement), and (iv) each warrant to purchase CERo preferred stock (each, a “ CERo warrant ”) outstanding as of immediately prior to the Effective Time will be converted into a warrant to acquire a number of shares of Class A common stock equal to the number of shares of CERo preferred stock subject to the corresponding warrant immediately prior to the Effective Time, multiplied by the Aggregate Liquidation Preference of such underlying shares of CERo preferred stock, and divided by $10.00, with the exercise price per share for such warrant equal to (A) the current aggregate exercise price of such warrant (the current exercise price per share of CERo preferred stock applicable to the corresponding warrant immediately prior to the Effective Time, multiplied by the number of shares of CERo preferred stock issuable upon exercise thereof), divided by (B) the number of shares of Class A common stock issuable upon exercise thereof. Subject to certain exceptions, such terms and conditions applicable to a New CERo warrant will be the same terms and conditions as were applicable to the New CERo warrant immediately prior to the Effective Time. The Company will issue an aggregate of approximately 5.0 million shares of Class A common stock to the holders of CERo common stock and CERo preferred stock as consideration in the Business Combination. Upon closing of the transaction, anticipated to occur in the second half of 2023, the combined company will be named CERo Therapeutics Holdings, Inc. and will be led by CERo and PBAX’s founding members, including Daniel Corey, M.D., CERo’s Chief Executive Officer, Chris Ehrlich, PBAX’s CEO, and Brian G. Atwood, the Chairman of PBAX. The combined company’s common stock is expected to be listed on the Nasdaq Capital Market under the ticker symbol “CERO.” Atwood will serve as Chief Executive Officer of the combined company, Ehrlich will serve as its Chief Financial Officer and Chief Operating Officer and Corey will serve as its Chief Technology Officer. As of February 13, 2024, parties entered into an amendement agreement to create two additional pools of earnout shares of common stock, one pool of which will contain 875,000 shares and another pool will contain 1,000,000 shares. In total, SPAC shall issue an additional 3,075,000 shares of Class A Common Stock in accordance with Earn-Out Allocation Schedule.
Under the Business Combination Agreement, the obligations of the parties to consummate the Business Combination are subject to the satisfaction or waiver of certain customary closing conditions of the respective parties, including, without limitation: (i) the approval and adoption of the Business Combination Agreement and transactions contemplated thereby by requisite vote of the Company’s stockholders (the “ Company Stockholder Approval ”) and CERo’s stockholders (the “ CERo Stockholder Approval ”); (ii) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; (iii) the absence of a Company Material Adverse Effect or SPAC Material Adverse Effect (each, as defined in the Business Combination Agreement) since the date of the Business Combination Agreement that is continuing; (iv) after giving effect to the transactions contemplated by the Business Combination Agreement, the Company has net tangible assets of at least $5,000,001 upon consummation of the Business Combination; (v) the Company’s initial listing application with Nasdaq in connection with the Business Combination has been approved and, immediately following the effective time of the Business Combination, the Company has satisfied any applicable initial and continuing listing requirements of Nasdaq and the shares of the Class A common stock have been approved for listing on Nasdaq, subject only to official notice of the issuance thereof; and (vi) the Registration Statement/Proxy Statement has become effective, no stop order has been issued by the Securities and Exchange Commission (the “ SEC ”) and remains in effect with respect to the Registration Statement/Proxy Statement, and no proceeding seeking such a stop order has been threatened or initiated by the SEC and remains pending. In addition, CERo’s obligation to consummate the Business Combination is subject to the condition that the Available Closing Cash shall be greater than or equal to $30,000,000 (after reduction for the aggregate amount of payments made or required to be made in connection with the SPAC Stockholder Redemption. The boards of directors of both CERo and PBAX have unanimously approved the proposed transaction with expected completion in the second half of 2023. As of February 8, 2024, transaction has been approved by the shareholders of Phoenix Biotech Acquisition.
Alan Hambelton, Sonya Erickson and Kassendra Galindo of Cooley LLP and Douglas S. Ellenoff and Stuart Neuhauser of Ellenoff Grossman & Schole LLP are acting as legal counsels to CERo. Cohen and Company Capital Markets, a Division of J.V.B. Financial Group, LLC is acting as the financial advisor and lead placement agent to PBAX. PBAX will pay $1.1625 million fee to Cohen. Stephen M. Davis and Jeffrey A. Letalien of Goodwin Procter LLP is serving as legal counsels to PBAX. RNA Advisors, LLC acted as fairness opinion provider for PBAX.
Phoenix Biotech Acquisition Corp. (NasdaqGM:PBAX) completed the acquisition of CERo Therapeutics, Inc. on February 14, 2024. In connection with the consummation of the business combination, the combined public company was renamed “CERo Therapeutics Holdings, Inc.” The shares of common stock of the combined public company have been approved for listing on the Nasdaq Global Market and are expected to commence trading under the ticker symbol “CERO” on February 15, 2024.