Item 1.01 Entry into a Material Definitive Agreement
On June
13, 2023, Blue Water Biotech, Inc., a Delaware corporation (the “Company”), entered into an Asset Purchase Agreement (the
“Purchase Agreement”) with WraSer, LLC, a Mississippi limited liability company, Xspire
Pharma, LLC, a Mississippi limited liability company (collectively, the “Seller”), and Legacy-Xspire
Holdings, LLC, a Delaware limited liability company and the parent company of the Seller (“Parent”).
Pursuant to, and subject to the terms and conditions of, the Purchase Agreement, on the Closing Date (as defined below) the Company will
purchase six FDA-approved pharmaceutical assets across several indications, including cardiology, otic infections, and pain management
(the “WraSer Assets”). The Company will assume liabilities associated with the WraSer Assets arising on and after the Closing
Date.
Under the terms of the Agreement, the Company
will purchase the WraSer Assets for (i) $3.5 million in cash at signing of the Purchase Agreement; (ii) $4.5 million in cash on the later
of (x) 90 days after the signing of the Purchase Agreement or (y) the date that all closing conditions under the Purchase Agreement are
met or otherwise waived (the “Closing Date”); (iii) 1.0 million shares of the Company’s common stock (the “Shares”)
issuable on the Closing Date, and (iv) $500,000 in cash one year from the Closing Date. The closing of the transaction is subject to
certain customary closing conditions and the delivery to the Company of financial statements of Seller and Parent for the fiscal years
ended December 31, 2022 and 2021 audited by a qualified auditor reasonably acceptable to the Company.
During the period between the Execution Date and
Closing Date, the Company will control and manage the WraSer Assets. During this period, the Company will fund the operation of the WraSer
Assets and receive any profit therefrom pursuant to the terms of the Management Services Agreement executed by the Company and the Seller
on the Execution Date (the “MSA”). Within 90 days of the Closing Date, the Company will use its best efforts to file with
the SEC (at its sole cost and expense) a registration statement on Form S-3 registering under the Securities Act of 1933, as amended (the
“Securities Act”), the resale of the Shares and will use its best efforts to have the registration statement declared effective
as soon as practicable after filing.
The products purchased by the Company under the
Purchase Agreement include ZONTIVITY®, a medication for the reduction of thrombotic cardiovascular events in patients with a history
of myocardial infarction or with peripheral arterial disease, as well as additional products for the treatment of hypertension, otitis
media, and pain management.
The Company, Sellers and Parent made customary
representations and warranties, and agreed to certain customary covenants, in the Purchase Agreement. Subject
to certain exceptions and limitations, each party has agreed to indemnify the other for breaches of representations, warranties and covenants
and for certain other matters.
The descriptions of the Purchase Agreement and the MSA set forth herein are qualified in their entirety
by reference to the full text of the Purchase Agreement and MSA, copies of which are filed herewith as Exhibit 10.1 and 10.2,
respectively.