Oracle Healthcare Acquisition Corp. to Merge with Precision
Therapeutics, Inc. PITTSBURGH and GREENWICH, Conn., Dec. 4
/PRNewswire-FirstCall/ -- Oracle Healthcare Acquisition Corp.
("Oracle") (OTC Bulletin Board: OHAQ; OHAQW; OHAQU), a
publicly-traded special purpose acquisition company, announced
today that it has entered into a definitive merger agreement
providing for the acquisition of privately-owned Precision
Therapeutics, Inc. ("PTI"), a life sciences company developing and
commercializing tests intended to assist physicians in
individualizing cancer therapy in an effort to improve treatment
outcomes. Under the agreement, subject to the satisfaction of
customary closing conditions, Pittsburgh-based PTI would be the
surviving corporation in a merger with a subsidiary of Oracle. PTI
would retain the Precision Therapeutics, Inc. name. Upon
consummation of the merger, Oracle would change its name to
Precision Therapeutics Corp. It is expected that Oracle would apply
to have its shares trade on NASDAQ upon completion of the merger.
Oracle is expected to have approximately $120 million in cash at
the closing, before payment of expenses of the merger and cash paid
to any PTI stockholders that exercise their Delaware law right to
appraisal of their shares and existing Oracle stockholders that
exercised their right to have their shares converted into cash.
These funds would remain in the merged company and be available to
finance sales and marketing, product development, clinical trials
and research and development, and for general corporate purposes.
Sean C. McDonald, President and Chief Executive Officer of PTI,
would become President and Chief Executive Officer and a director
of the combined company, which would be headquartered in
Pittsburgh, Pennsylvania. Oracle board members Larry Feinberg, Joel
Liffmann and Per G. H. Lofberg would remain on the board of the
combined company after the merger, as would Kevin Johnson, who is a
member of the boards of both Oracle and PTI. "We are very excited
about this merger as it would provide the financial resources to
capitalize on the progress we have made in commercializing our
ChemoFx test," said Sean McDonald, President and CEO of PTI. "The
capital available to us upon the closing of the transaction would
support an increased sales and marketing effort, which should allow
us to continue the rapid revenue growth that we have been
experiencing. In addition we look forward to working with Larry,
Joel and Per and leveraging their experience as Precision
transitions to a publicly traded company." Larry N. Feinberg,
Founder and Chairman of Oracle, said, "This merger combines
Precision Therapeutics' proprietary ChemoFx test with Oracle's
access to the capital markets. Precision Therapeutics has a strong
management team with a proven track record. They are a highly
focused, creative team with the ability to execute and a reputation
for building businesses." "Since its inception, Precision
Therapeutics has raised approximately $73 million in venture
capital from premier healthcare investors. The ChemoFx test has
been validated in numerous clinical studies and has been reimbursed
by both Medicare and commercial payors. Additionally, Precision has
built a focused direct sales and marketing organization, which is
driving adoption of the product initially in the gynecological
cancer market," Mr. Feinberg added. This transaction has been
reviewed and approved by the board of directors of each of Oracle
and PTI. In addition to other conditions, the transaction is
subject to stockholder approval from both companies and termination
or expiration of the waiting periods under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976. The registration statement
related to the issuance of Oracle common stock to PTI security
holders in the merger and the proxy materials to be sent to
Oracle's stockholders are subject to prior review by the Securities
and Exchange Commission (the "SEC"). The holders of PTI capital
stock representing the requisite vote of the PTI stockholders have
voted for the transaction and related matters pursuant to written
consents, with the approval of additional PTI stockholders to be
solicited following completion of the SEC review process. Following
completion of such SEC review process, Oracle will seek stockholder
approval of the transaction and related matters at a stockholders'
meeting convened for such purpose. The approval of a majority of
the Oracle stockholders represented at the meeting in person or by
proxy must be obtained. Oracle stockholder approval will also be
subject to having less than 20% of its stockholders both vote
against the transaction and properly exercise certain conversion
rights, as provided under Oracle's charter. In the event that the
merger is not completed by the expiration date set forth in the
merger agreement, Oracle's officers will take all actions necessary
to promptly dissolve and liquidate Oracle in accordance with its
charter. Oracle is represented in the transaction by Willkie Farr
& Gallagher LLP, and PTI is represented by Cooley Godward
Kronish LLP. Description of the Transaction Under the merger
agreement, Oracle would issue to each holder of PTI capital stock a
number of shares of Oracle common stock based on an exchange ratio
calculated in accordance with the merger agreement. The exchange
ratio pursuant to which shares of PTI common stock would be
exchanged for shares of Oracle common stock will be equal to the
quotient obtained by dividing (x) the sum of (i) the product of (A)
22,500,000 and (B) the average closing sales price per share of
Oracle common stock as reported on the OTC Bulletin Board for the
consecutive period beginning at 9:30 am New York time on the
thirteenth trading day immediately preceding the closing date and
concluding at 4:30 pm New York time on the third trading day
immediately preceding the closing date and (ii) the aggregate
exercise price of all outstanding PTI options, warrants and other
stock awards outstanding immediately prior to the effective time of
the merger, by (b) the number of shares of PTI common stock
outstanding on a fully diluted basis immediately prior to the
effective time of the merger assuming the conversion or exercise
(as applicable) of all PTI preferred stock, options, warrants,
bridge notes and other rights to acquire PTI common stock
outstanding at such time, by (y) the average closing sales price
per share of Oracle common stock as reported on the OTC Bulletin
Board for the consecutive period beginning at 9:30 am New York time
on the thirteenth trading day immediately preceding the closing
date and concluding at 4:30 pm New York time on the third trading
day immediately preceding the closing date. Assuming an exchange
ratio of approximately 0.4059 of a share of Oracle common stock per
PTI share, based on the closing sales price of Oracle common stock
on November 30, 2007 and the number of outstanding shares of PTI
capital stock and shares issuable upon exercise of outstanding
options and warrants to purchase PTI capital stock as of November
30, 2007, Oracle would be obligated to issue an aggregate of
approximately 19.0 million shares of Oracle common stock at the
closing (including 2.25 million shares to be deposited into an
escrow account). Under the merger agreement, Oracle would also
assume all outstanding options and warrants to purchase PTI capital
stock, and these options and warrants would become exercisable for
shares of Oracle common stock (and, potentially in limited
circumstances described below, cash). Each outstanding PTI option
and warrant at the closing of the merger would become exercisable
for a number of shares of Oracle common stock equal to the number
of PTI shares into which the security is then exercisable,
multiplied by the exchange ratio, and the exercise price per share
would be equal to the existing exercise price divided by the
exchange ratio. Oracle would reserve approximately 4.5 million
additional shares of Oracle common stock for future issuance in
connection with Oracle's assumption of PTI's outstanding options
and warrants. To the extent that currently outstanding PTI options
or warrants are exercised prior to the closing of the merger, the
number of shares of Oracle common stock that would be issued at the
closing of the merger would increase and the number of the shares
of Oracle common stock reserved for future issuance in connection
with Oracle's assumption of PTI's outstanding options and warrants
would decrease by the same amount. Stockholders of Oracle would
continue to own their existing shares of Oracle common stock and
their existing Oracle warrants and units, as applicable. In
addition, on the date that is 180 days following the closing of the
merger, if the average closing sales price per share of Oracle
common stock for the preceding seven trading days is less than
$7.78 per share, then Oracle would issue, or reserve for issuance
as applicable, additional shares of Oracle common stock, or make a
payment in cash (or a combination of cash and additional shares) to
the former holders of PTI capital stock, options and warrants, such
that the aggregate market value of the cash and/or Oracle common
stock issued or reserved for issuance (aggregating the shares
issued upon the completion of the merger and at such subsequent
date) would be valued at $7.78 per share as of such date. However,
the maximum number of additional shares that Oracle is required to
issue or reserve for issuance pursuant to the preceding sentence
would be 6,666,667 shares, as reduced to the extent any such
amounts owed are paid in cash, and the amount of cash may be paid
is limited as described in the merger agreement. Any cash paid or
shares of Oracle common stock issued or reserved for issuance in
accordance with this additional payment would be issued or
reserved, as applicable, pro rata to the former PTI securityholders
based on the relative number of shares of Oracle common stock
issued to, or reserved for issuance to, each such holder at the
time of closing of the merger, subject to pro rata reallocation of
shares that would otherwise be reserved for issuance to holders of
options or warrants that expire or are forfeited between the
closing of the merger and the determination date among the
remaining former PTI securityholders. In addition, under the merger
agreement, the former holders of PTI common stock receiving shares
of Oracle common stock at the closing and the holders of the
assumed PTI options and warrants would have the right to receive
their pro rata portion of an earn-out payment of up to an
additional 4,250,000 shares of Oracle common stock if the combined
company achieves (i) trailing 12 month net revenue in excess of $7
million from the sale of services or products for use in connection
with non-gynecologic cancers, (ii) trailing 12 month net revenue in
excess of $40 million from the sale of services or products for any
use or (iii) cumulative aggregate net revenue in excess of $10
million from the sale of services or products for use in connection
with non-gynecologic cancers. The calculation period to earn 100%
of the 4,250,000 shares would end on June 30, 2010. In the event
that the first of these milestones is not achieved by June 30, 2010
but is achieved by the calculation period ending December 31, 2010,
the former holders of PTI common stock, options and warrants would
have the right to receive a pro rata portion of such earn-out
payment equal to 75% of the 4,250,000 shares of Oracle common
stock, or 3,187,500 shares of Oracle common stock. The merger
agreement provides that the milestones would be calculated without
giving effect to any acquisitions following the effective time of
the merger. Any shares of Oracle common stock that would otherwise
be reserved for issuance in accordance with this paragraph to
holders of options or warrants that expire or are forfeited between
the closing of the merger and the determination date would be
reallocated on a pro rata basis among the remaining former PTI
securityholders. About Oracle Healthcare Acquisition Corp. Oracle
is a blank check company formed on September 1, 2005 for the
purpose of acquiring, through a merger, capital stock exchange,
asset acquisition or other similar business combination, an
operating business in the healthcare industry. On March 8, 2006,
Oracle consummated its initial public offering of 15,000,000 units,
which were sold at an offering price of $8.00 per unit, which
together with the private placement of 833,334 warrants to certain
founding stockholders of Oracle at an offering price of $1.20 per
warrant, generated total gross proceeds of approximately
$121,000,000. Of this amount, $113,500,000 was placed in trust,
including $2,400,000 in deferred underwriting fees. Oracle common
stock, warrants and units are quoted on the OTC Bulletin Board
under the symbols OHAQ, OHAQW and OHAQU, respectively. About
Precision Therapeutics, Inc. PTI is a life sciences company
developing and commercializing tests intended to assist physicians
in individualizing cancer therapy in an effort to improve treatment
outcomes. PTI has developed and currently markets its proprietary
ChemoFx test. ChemoFx is a chemoresponse test, a type of test that
uses a patient's live tumor cells to assess his or her likelihood
of responding to various cancer drugs, or drug combinations, that
the patient's physician is considering for treatment. ChemoFx
measures both the responsiveness, or sensitivity, of tumor cells to
particular drugs, as well as their resistance. For more information
on PTI, please visit its website at
http://www.precisiontherapeutics.com/. Additional Information About
the Merger and Where to Find It This press release shall not
constitute an offer to sell or the solicitation of an offer to buy
securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful under the securities laws of such jurisdiction. In
connection with the proposed merger, Oracle will file a proxy
statement and other materials with the SEC. WE URGE INVESTORS TO
READ THE PROXY STATEMENT AND THESE OTHER MATERIALS CAREFULLY WHEN
THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT ORACLE, PTI AND THE PROPOSED MERGER. Investors
will be able to obtain free copies of the proxy statement (when
available) as well as other filed documents containing information
about Oracle at http://www.sec.gov/, the SEC's Web site.
Participants in the Solicitation Oracle and its executive officers
and directors may be deemed, under SEC rules, to be participants in
the solicitation of proxies from Oracle's stockholders with respect
to the proposed merger. Information regarding the officers and
directors of Oracle is set forth in Oracle's Annual Report on Form
10-K for the fiscal year ended December 31, 2006, as filed with the
SEC on March 27, 2007. More detailed information regarding the
identity of potential participants, and their direct or indirect
interests, by securities holdings or otherwise, will be set forth
in the proxy statement and other materials to be filed with the SEC
in connection with the proposed merger. Special Note Regarding
Forward-Looking Statements This press release contains
forward-looking statements that involve risks and uncertainties
relating to future events or our future financial performance.
These statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results to differ
materially from those expressed or implied by such forward-looking
statements. Factors that could cause or contribute to such
differences include, but are not limited to, factors detailed in
Oracle's SEC filings. You are advised to consult further
disclosures Oracle may make on related subjects in its future
filings with the SEC. In some cases, you can identify
forward-looking statements by terminology such as "may," "could,"
"should," "expect," "plan," "intend," "anticipate," "believe,"
"estimate," "predict," "potential" or "continue," the negative of
such terms or other comparable terminology. These statements are
only predictions. Although Oracle believes that the expectations
reflected in the forward-looking statements are reasonable, Oracle
can give no assurance that such expectations will prove to be
correct, nor can Oracle guarantee future results, levels of
activity, performance or achievements. Contacts: Precision
Therapeutics, Inc. David R. Heilman Chief Financial Officer (412)
432-1505 Oracle Healthcare Acquisition Corp. Joel D. Liffmann
President and Chief Operating Officer Oracle Healthcare Acquisition
Corp. (203) 862-7900 DATASOURCE: Oracle Healthcare Acquisition
Corp. CONTACT: David R. Heilman, Chief Financial Officer of
Precision Therapeutics, Inc., +1-412-432-1505, ; or Joel D.
Liffmann, President and Chief Operating Officer of Oracle
Healthcare Acquisition Corp., +1-203-862-7900 Web site:
http://www.precisiontherapeutics.com/
Copyright
