Seneca Biopharma, Leading BioSciences To Merge In All-stock Transaction - Quick Facts

(RTTNews) - Seneca Biopharma, Inc. (SNCA) and privately-held company Leading BioSciences, Inc. or LBS, announced Thursday that they have entered into a definitive agreement under which a wholly owned subsidiary of Seneca will merge with LBS in an all-stock transaction.

Immediately following the merger, it is anticipated that Seneca equity holders will own approximately 26.2% of the combined company and LBS equity holders will own approximately 73.8% of the combined company on a fully diluted basis using an adjusted treasury stock method.

Shareholders of Seneca will also receive one contingent value right for each share of Seneca common stock (including any warrants exercisable for shares of Seneca common stock) as a dividend.

The transaction has been approved by the board of directors of both companies. The merger is expected to close in the first half of 2021 subject to the approval of Seneca stockholders at a special stockholder meeting, the approval of LBS stockholders, the closing of the financing, as well as other customary conditions.

The combined company will focus on advancing LBS's lead pipeline asset, LB1148, in clinical studies to evaluate its potential to improve restoration of normal GI function following major surgery and reduce certain postoperative complications such as abdominal adhesions.

The combined company will be led by LBS CEO Thomas Hallam, and will be headquartered in Carlsbad, California. The board of directors is expected to be composed of eight members, consisting of three from Seneca and five from LBS.

Upon completion of the merger, the company is expected to operate under the name Palisade Bio, Inc. and trade on the Nasdaq Capital Market under the ticker symbol PALI.

Altium Capital has agreed to invest $22.5 million at the close of the merger, subject to customary conditions. The private placement financing will help fund continued development of the combined company's clinical programs, including LB1148, and is expected to close immediately prior to the completion of the merger.