Chanticleer Holdings, Inc. (Nasdaq: BURG) and Sonnet
BioTherapeutics, Inc., a privately-held clinical stage
biopharmaceutical company developing innovative targeted biologic
drugs, announced today they have entered into a definitive merger
agreement under which the shareholders of Sonnet will become the
majority owners of Chanticleer’s outstanding common stock as more
fully described below upon the closing of the merger. Subject to
shareholder approval by both Chanticleer and Sonnet and approval of
the Nasdaq Stock Market, the proposed merger will result in a
publicly-traded company operating under the Sonnet name under the
proposed Nasdaq ticker symbol “SONN” that will focus on advancing
Sonnet’s pipeline of oncology candidates and the strategic
expansion of Sonnet’s technology platform into other human
diseases.
“This merger is an exciting next step for Sonnet that
complements Sonnet’s committed financing of up to $100 million and
further supports our commitment to advancing our novel oncology
product candidates with the ultimate goal of overcoming persistent
challenges in cancer care,” said Pankaj Mohan, PhD, Founder and
Chief Executive Officer of Sonnet. “As we become a publicly-traded
entity, we look forward to accelerating the execution of our
proprietary platform technology for innovating immune therapeutics
that includes our pipeline of clinical and pre-clinical therapeutic
candidates.”
“The transaction with Sonnet comes after a thorough review of
Chanticleer’s current operations and strategic alternatives,”
commented Mike Pruitt, Chairman and Chief Executive Officer of
Chanticleer. “The decision by our management and board to choose
Sonnet to be our merger partner will allow our shareholders to
participate in a dynamic company with a robust pipeline, backed by
a sizeable commitment from an institutional investor to continue
the development of the drug candidates.”
“Additionally, as part of this transaction Chanticleer will
spin-off its current restaurant operations into a newly created
entity to be owned by the current Chanticleer stockholders.
The spin-off entity intends to seek quotation or listing of its
common stock as soon as practicable. Fred, Patrick, Troy and I
continue to be optimistic in the direction of our Better Burger
business and the success of the numerous initiatives we have taken
as a company thus far in 2019 to enhance delivery, technology,
customer loyalty and the focus of building a leading culture for
our employees. We believe this new company platform will have
a balance sheet and overhead structure which is better suited for a
growing restaurant company that will allow scalability we have been
seeking both organically and through acquisitions to become a
leader in the Better Burger Segment,” continued Mr. Pruitt.
“Furthermore, with the participation of the current shareholders
of Chanticleer in the publicly traded shares of Sonnet, our current
shareholders will not only maintain their ongoing investment in the
restaurant business but will also have potential upside from the
potential growth and expansion of Sonnet,” concluded Mr.
Pruitt.
Sonnet’s proprietary FHAB™ (Fully Human Albumin Binding)
technology utilizes a fully human single chain antibody fragment
(scFv) linked to either one or two therapeutic molecules capable of
affecting targeted single- or bi-specific mechanisms of action. As
its name suggests, the FHAB construct contains a domain that binds
to and “hitch-hikes” on human serum albumin (HSA) for transport to
tumors and sites of inflammation, as well as extending therapeutic
half-life. Sonnet’s platform comprises experience in the biology of
cytokines, a class of cell signaling peptides that, among other
important functions, serve as immunomodulatory agents with potent
anti-cancer properties.
Sonnet’s pipeline of therapeutic compounds is currently focused
on oncology indications of high unmet medical needs. Sonnet’s lead
product candidate, SON-080, is a fully human version of low dose
Interleukin-6 (IL-6) that has successfully completed Phase I trials
and is expected to advance to a pilot clinical efficacy study
during the first half of 2020 in chemotherapy-induced peripheral
neuropathy (CIPN), a common side effect of antineoplastic cancer
regimens with blockbuster commercial potential.
Sonnet’s most advanced FHAB-derived compound, SON-1010
(IL12-FHAB), utilizes a fully human version of Interleukin-12
(IL-12) that will also be linked to FHAB in Sonnet’s first
bi-specific construct, SON-1210 (IL15-FHAB-IL12), with fully human
Interleukin-15 (IL-15). Both of these compounds are being developed
for undisclosed solid tumor indications and are expected to enter
Phase I clinical trials during 2020 and 2021, respectively. In the
discovery pipeline, the company is investigating SON-2014
(GMcSF-FHAB-IL18), a bi-specific combination of
Granulocyte-Macrophage Colony Stimulating Factor (GM-CSF) and
Interleukin-18 (IL-18) for undisclosed cancers, as well SON-3015
(anti-IL6-FHAB-anti-TGFβ), a bi-specific combination of anti-IL6
and anti-Tumor Growth Factor Beta for tumor and bone
metastases.
"Our vision is to leverage our FHAB platform to innovate immune
therapeutic products with better safety and efficacy," said John
Cini, PhD, Sonnet’s Chief Scientific Officer. "We believe our most
advanced candidate, SON-080, represents a highly differentiated,
disease-modifying treatment for CIPN, an indication of high unmet
medical need. Behind SON-080, we have pipeline of distinguished
biologic new molecular entities that we believe has the potential
to change the cancer treatment landscape and positively impact the
lives of patients and their families.”
Proposed Transaction Detail
Immediately following the closing of the merger, the former
Sonnet shareholders will hold approximately 94% of the outstanding
shares of common stock of the combined company and the shareholders
of Chanticleer prior to the merger will retain ownership of
approximately 6% of the outstanding shares of Chanticleer. In
addition, the spin-off entity will receive a five year warrant to
purchase approximately 2% of the number of shares issued and
outstanding of the Chanticleer at the time of completion of the
merger at a purchase price of $0.01 per share. Additionally,
terms of the merger include a payment of $6,000,000 to Chanticleer
from Sonnet, a portion of which is intended to repay certain of
Chanticleer’s outstanding indebtedness in conjunction with a
spin-off of all of the existing Chanticleer assets and liabilities.
The balance of this payment will be retained by the spin-off entity
for working capital and general corporate purposes.
Upon completion of the merger, Chanticleer will change its name
to Sonnet BioTherapeutics Holdings, Inc. and the existing Sonnet
board will lead the merged company and Dr. Pankaj Mohan will serve
as the Chairman and Chief Executive Officer.
Chardan Capital Markets is acting as exclusive advisor to Sonnet
on the proposed transaction and Lowenstein Sandler LLP is acting as
legal counsel. Libertas Law Group is acting as legal counsel
to Chanticleer and K&L Gates LLP is acting as special tax
counsel.
Conference Call Information
Chanticleer and Sonnet will co-host a conference call to discuss
the proposed merger on October 10, 2019, at 8:30 a.m. Eastern
Time.
To access the live conference call, please dial 1-877-407-0784
from the U.S. and Canada or 1-201-689-8560 internationally and
provide the conference ID “13695442” five to ten minutes before the
start of the call. A live audio webcast of the presentation will
also be available on the “Investor Relations” page of the
Chanticleer website. A replay of the webcast will be archived on
Chanticleer website for approximately 30 days following the
call.
About Sonnet BioTherapeutics, Inc.
Headquartered in Princeton, NJ, Sonnet BioTherapeutics is a
clinical stage biotechnology company with a proprietary platform
for innovating biologic drugs with single- or bi-specific
mechanisms of action. Known as FHAB™ (Fully Human Albumin Binding),
the technology utilizes a fully human single chain antibody
fragment (scFv) that binds to and “hitch-hikes” on human serum
albumin (HSA) for transport to target tissues. FHAB™ is the
foundation of a modular, plug-and-play construct for potentiating a
range of large molecule therapeutic classes, including cytokines,
peptides, antibodies and vaccines.
About Chanticleer Holdings, Inc.
Headquartered in Charlotte, NC, Chanticleer Holdings (BURG),
owns, operates and franchises fast casual and full-service
restaurant brands, including American Burger Company, BGR – Burgers
Grilled Right, Little Big Burger, Just Fresh and Hooters.
Additional Information about the Proposed Merger and
Where to Find It
In connection with the proposed merger, Chanticleer and Sonnet
intend to file relevant materials with the Securities and Exchange
Commission, or the SEC, including a registration statement on Form
S-4 that will contain a prospectus and a proxy statement. Investors
and security holders of Chanticleer and Sonnet are urged to read
these materials when they become available because they will
contain important information about Chanticleer, Sonnet and the
proposed merger. The proxy statement, prospectus and other relevant
materials (when they become available), and any other documents
filed by Chanticleer with the SEC, may be obtained free of charge
at the SEC website at www.sec.gov. In addition, investors and
security holders may obtain free copies of the documents filed with
the SEC by Chanticleer by directing a written request to:
Chanticleer Holdings, c/o Michael D. Pruitt, Chief Executive
Officer, 7621 Little Avenue, Suite 414, Charlotte, NC 28226.
Investors and security holders are urged to read the proxy
statement, prospectus and the other relevant materials when they
become available before making any voting or investment decision
with respect to the proposed merger.
This communication shall not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to
buy any securities, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offering of securities
in connection with the proposed merger shall be made except by
means of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended.
Participants in the Solicitation
Chanticleer and its directors and executive officers and Sonnet
and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from the shareholders
of Chanticleer in connection with the proposed transaction under
the rules of the SEC. Information about the directors and executive
officers of Chanticleer and their ownership of shares of
Chanticleer’s common stock is set forth in its Annual Report on
Form 10-K for the year ended December 31, 2018, which was filed
with the SEC on April 1, 2019, and in subsequent documents filed
with the SEC, including the joint proxy statement/prospectus
referred to above. Additional information regarding the persons who
may be deemed participants in the proxy solicitations and a
description of their direct and indirect interests in the proposed
merger, by security holdings or otherwise, will also be included in
the joint prospectus/proxy statement and other relevant materials
to be filed with the SEC when they become available. These
documents are available free of charge at the SEC web site
(www.sec.gov) and from the Chief Executive Officer at Chanticleer
at the address described above.
Forward-Looking Statements
This communication contains “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of
1995. Chanticleer and Sonnet generally identify forward-looking
statements by terminology such as “may,” “should,” “expects,”
“plans,” “anticipates,” “could,” “intends,” “target,” “projects,”
“contemplates,” “believes,” “estimates,” “predicts,” “potential” or
“continue” or the negative of these terms or other similar words.
These statements are only predictions. Chanticleer and Sonnet have
based these forward-looking statements largely on their
then-current expectations and projections about future events and
financial trends as well as the beliefs and assumptions of
management. Forward-looking statements are subject to a number of
risks and uncertainties, many of which involve factors or
circumstances that are beyond each of Chanticleer’s and Sonnet’s
control. Chanticleer’s and Sonnet’s actual results could differ
materially from those stated or implied in forward-looking
statements due to a number of factors, including but not limited
to: (i) risks associated with Chanticleer’s ability to obtain the
shareholder approval required to consummate the proposed merger
transaction and the timing of the closing of the proposed merger
transaction, including the risks that a condition to closing would
not be satisfied within the expected timeframe or at all or that
the closing of the proposed merger transaction will not occur; (ii)
the outcome of any legal proceedings that may be instituted against
the parties and others related to the merger agreement; (iii) the
occurrence of any event, change or other circumstance or condition
that could give rise to the termination of the merger agreement,
(iv) unanticipated difficulties or expenditures relating to the
proposed merger transaction, the response of business partners and
competitors to the announcement of the proposed merger transaction,
and/or potential difficulties in employee retention as a result of
the announcement and pendency of the proposed merger transaction;
and (v) those risks detailed in Chanticleer’s most recent Annual
Report on Form 10-K and subsequent reports filed with the SEC, as
well as other documents that may be filed by Chanticleer from time
to time with the SEC. Accordingly, you should not rely upon
forward-looking statements as predictions of future events. Neither
Chanticleer nor Sonnet can assure you that the events and
circumstances reflected in the forward-looking statements will be
achieved or occur, and actual results could differ materially from
those projected in the forward-looking statements. The
forward-looking statements made in this communication relate only
to events as of the date on which the statements are made. Except
as required by applicable law or regulation, Chanticleer and Sonnet
undertake no obligation to update any forward-looking statement to
reflect events or circumstances after the date on which the
statement is made or to reflect the occurrence of unanticipated
events.
Sonnet
BioTherapeutics Investor Contact |
Chanticleer Holdings Investor Contact |
Alan Lada |
Jason Assad |
Solebury Trout |
Chanticleer Holdings |
617-221-8006 |
678-570-6791 |
alada@soleburytrout.com |
ja@chanticleerholdings.com |
Source: Sonnet BioTherapeutics, Inc.
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