In August 2023, after exploring other alternatives, including licensing collaborations and certain additional expense reductions, our Board made the determination to halt further development of our programs and to conduct a comprehensive exploration of strategic alternatives focused on maximizing shareholder value. As part of this evaluation process, the Board announced its intention to explore a Strategic Plan that included, but was not limited to, an acquisition, merger, business combination, dissolution or other transaction.
Following announcement of the Strategic Plan, our Board and management worked with outside advisors, on a formal and informal basis, to pursue a sale or merger of the Company or one or more sales of our assets, including a reverse merger. Between August 2023 and February 2024, our Board and management continued to evaluate a potential reverse merger with several strategic candidates as well as a potential dissolution of the Company.
Despite broad canvassing and discussions with several potential strategic parties, we were ultimately unsuccessful in identifying any interested purchasers or partners, or any viable transactions.
In light of our financial condition, on December 27, 2023, we entered into (i) a Lease Termination and Mutual Release Agreement (the “Lease Termination and Mutual Release Agreement”) with 350 Technology Drive Partners, LLC, a Pennsylvania limited liability company (the “Landlord”), and (ii) a Bill of Sale (the “Bill of Sale”) for the benefit of University of Pittsburgh of the Commonwealth System of Higher Education, a Pennsylvania non-profit corporation (the “University of Pittsburgh”), in each case in connection with the termination (the “Lease Termination”) of the Lease Agreement, dated October 2, 2020, by and between us and the Landlord, as amended by the First Amendment to Lease Agreement, dated December 28, 2020, by and between us and the Landlord, and the Second Amendment to Lease Agreement, dated April 21, 2021, by and between us and the Landlord (the “Lease Agreement”), in connection with the premises located at Suite 421, 350 Technology Drive, Pittsburgh, PA 15219 (the “Premises”). Pursuant to the Lease Termination and Mutual Release Agreement, the Company and the Landlord agreed to terminate the Lease Agreement, effective as of February 29, 2024 (the “Lease Termination Date”), subject to the terms and conditions therein. The Lease Termination and Mutual Release Agreement provided that we would surrender the Premises on or prior to January 31, 2024 (which we have done), and shall have no further rent obligations after the Lease Termination Date. Absent such termination, our obligations under the Lease Agreement would have run through July 2031 and would have represented approximately $7.1 million of future lease expenses. As consideration for the Landlord’s agreement to terminate the Lease Agreement as of the Lease Termination Date, we paid the Landlord a lease termination fee (the “Lease Termination Fee”) of $1,550,000 and entered into the Bill of Sale, which conveyed to the University of Pittsburgh the furniture, fixtures and equipment located in the Premises pursuant to the terms and conditions therein. In addition, we paid the Landlord’s sole listing agent for the Premises a commission of approximately $178,000 in connection with its services relating to the Lease Termination.
In light of the strategic alternatives review and following the implementation of the Strategic Plan, our Board determined that approving the Plan of Dissolution gives our Board the most flexibility in optimizing value for our stockholders and, as a result, on February 22, 2024, our Board approved the Dissolution, and on March 5, 2024, our Board adopted resolutions formally approving the Plan of Dissolution and recommending that our stockholders approve the Plan of Dissolution and the Dissolution.
Reasons for the Proposed Dissolution
The Board believes that the Dissolution is in NeuBase’s best interests and the best interests of our stockholders. The Board considered and pursued at length potential strategic alternatives available to NeuBase such as a merger, asset sale, strategic partnership or other business combination transaction, and, following the results of such review, believes that pursuing a wind-up of the Company in accordance with the Plan of Dissolution gives the Board the most flexibility in optimizing value for our stockholders.
In making its determination to approve the Dissolution, the Board considered, in addition to other pertinent factors, the fact that NeuBase currently has no significant remaining business operations or business prospects; the fact that NeuBase will continue to incur substantial accounting, legal and other expenses associated with being a public company despite having no source of revenue or financing alternatives; and the fact that NeuBase has conducted an evaluation to identify remaining strategic alternatives involving