Avenue Therapeutics, Inc. (the “Company” or “Avenue”) was incorporated in Delaware on February 9, 2015, as a wholly owned subsidiary of Fortress Biotech, Inc. (“Fortress”), to develop and market pharmaceutical products for the acute care setting in the United States. The Company will focus on developing its product candidate, an intravenous (“IV”) formulation of tramadol HCI (“IV Tramadol”), for moderate to moderately severe post-operative pain.

stockholders, (“the Stock Purchase Transaction”) after deducting commission fees and other offering costs

million in the aggregate (“the Merger Transaction”). The second stage closing is subject to the satisfaction of certain closing conditions, including conditions pertaining to U.S. Food and Drug Administration approval, labeling, scheduling and the absence of any Risk Evaluation and Mitigation Strategy (“REMS”) or similar restrictions in effect with respect to IV Tramadol, as well as the expiration of any waiting period applicable to the acquisition under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

 

Concurrently with the execution and delivery of the SPMA, the Company and InvaGen entered into a credit agreement (the “Credit Agreement”), pursuant to which InvaGen will provide initial financing to the Company in an amount of up to $3.0 million in the form of a line of credit, up to the closing of the Stock Purchase Transaction which occurred on February 8, 2019. Any amounts drawn on the line of credit will be deducted from the aggregate consideration payable to the Company pursuant to the Stock Purchase Transaction.  As of December 31, 2018, no amounts were drawn on this line of credit.  Subject to the terms and conditions described in the SPMA, the Buyer may also provide interim financing to the Company in an amount of up to $7.0 million during the time period between the Stock Purchase Transaction (which occurred on February 8, 2019) and the Merger Transaction. Any amounts drawn on the interim financing will be deducted from the aggregate consideration payable to Company stockholders by virtue of the Merger Transaction.

 

Concurrently with the execution and delivery of the Credit Agreement, Fortress and InvaGen entered into a guaranty (the “Guaranty”), pursuant to which Fortress guaranteed the full payment to InvaGen, when due, of all amounts of (x) all obligations of the Company to InvaGen under the Credit Agreement, whether for principal interest, fees, charges, expenses or otherwise, and (y) any and all costs and expenses incurred by InvaGen in enforcing any of its rights under the Guaranty.