Current Report Filing (8-k)
January 12 2023 - 4:29PM
Edgar (US Regulatory)
0001872356
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--12-31
MOLEKULE GROUP, INC.
0001872356
2023-01-12
2023-01-12
iso4217:USD
xbrli:shares
iso4217:USD
xbrli:shares
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C.
20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or Section 15(d) of
the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
January 12, 2023
| MOLEKULE
GROUP, INC. |
| (Exact
name of registrant as specified in its charter) |
| Delaware |
|
001-41096 |
|
45-3213164 |
(State or other jurisdiction
of incorporation) |
|
(Commission
File Number) |
|
(IRS Employer Identification No.) |
10455 Riverside Dr.
Palm Beach Gardens, FL |
|
33410 |
| (Address of principal executive offices) |
|
(Zip Code) |
Registrant’s telephone number, including
area code: (833) 652-5326
| AeroClean
Technologies, Inc. |
| (Former
name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| |
¨ |
Written communications pursuant
to Rule 425 under the Securities Act (17 CFR 230.425) |
| |
¨ |
Soliciting material pursuant
to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| |
¨ |
Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| |
¨ |
Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class |
|
Trading
Symbol(s) |
|
Name
of Each Exchange on Which Registered |
| Common stock, par value $0.01 per share |
|
MKUL |
|
The Nasdaq Stock Market LLC |
Indicate by check mark whether
the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter)
or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company x
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Introductory Note
On January 12, 2023 (the “Closing
Date”), the registrant completed the previously announced acquisition of Molekule, Inc., a Delaware corporation (“Molekule”),
pursuant to the Agreement and Plan of Merger dated as of October 3, 2022 (the “Merger Agreement”) by and among
the registrant, Air King Merger Sub Inc., a Delaware corporation and direct wholly-owned subsidiary of the registrant (“Merger
Sub”), and Molekule. Pursuant to the Merger Agreement, Merger Sub merged with and into Molekule, with Molekule continuing as
the surviving entity and a wholly-owned subsidiary of the registrant (the “Merger”). In connection with the closing
of the Merger (the “Closing”), the registrant changed its name from “AeroClean Technologies, Inc.”
to “Molekule Group, Inc.” Unless the context otherwise requires, “we,” “us,” “our,”
and the “Company” refer to the combined company following the Merger, together with its subsidiaries, “AeroClean”
refers to the registrant prior to the Closing and Molekule Group, Inc. (f/k/a AeroClean Technologies, Inc.) following Closing,
and “Molekule” refers to Molekule, Inc. prior to and following the Closing.
The material provisions of the Merger Agreement
are described in the section entitled “The Merger Agreement” at pages 121 to 129 of the information statement/prospectus filed with the Securities and Exchange Commission (the “SEC”) on December 21, 2022 (the “Information
Statement/Prospectus”). The description of the Merger Agreement contained in such section of the Information Statement/Prospectus
is incorporated by reference herein.
The description of the Merger Agreement and related
transactions (including, without limitation, the Merger) in this Current Report on Form 8-K does not purport to be complete and is
subject to and qualified in its entirety by reference to the full text of the Merger Agreement, which is attached hereto as Exhibit 2.1
and incorporated herein by reference. Capitalized terms used in this Current Report on Form 8-K and not otherwise defined shall have
the meaning set forth in the Merger Agreement.
The Merger Agreement has been incorporated by
reference into this Current Report on Form 8-K only to provide investors with information regarding its terms and not to provide
investors with any other factual information regarding AeroClean, Molekule or their businesses as of the date of the Merger Agreement
or as of any other date. The representations, warranties and covenants set forth in the Merger Agreement have been made only for the purposes
of the Merger Agreement and solely for the benefit of the parties thereto, and may be subject to limitations agreed upon by the contracting
parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties
to the Merger Agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the
contracting parties that differ from those applicable to investors. Investors are not third-party beneficiaries under the Merger Agreement
and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state
of facts or condition of the parties thereto or any of their respective subsidiaries or affiliates. In addition, information regarding
the subject matter of the representations and warranties made in the Merger Agreement may change after the date of the Merger Agreement.
Item 1.01 Entry into a Material Definitive Agreement.
The disclosure set forth in this Current Report on Form 8-K under
“Introductory Note” and under Item 2.03 herein is incorporated in this Item 1.01 by reference.
Stockholders Agreement
On January 12, 2023, AeroClean entered into
a stockholders agreement with certain stockholders of AeroClean and certain stockholders of Molekule (the “Stockholders Agreement”).
The Stockholders Agreement provides that such stockholders will take all reasonable actions to nominate Brad Feld and the existing members
of AeroClean’s board of directors to be members of the board of directors of the Company following the consummation of the Merger
(the “Company Board”) and until immediately after the Company’s 2024 annual meeting of stockholders.
This description of the Stockholders Agreement
does not purport to be complete and is qualified in its entirety by the terms and conditions of the Stockholders Agreement, the form of
which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
Amended and Restated Registration Rights Agreement
On January 12, 2023, AeroClean and certain
stockholders of AeroClean and Molekule entered into an Amended and Restated Registration Rights Agreement (the “Amended and Restated
Registration Rights Agreement”). Under the Amended and Restated Registration Rights Agreement, certain stockholders signatories
thereto have certain “demand” and “piggyback” registration rights. The Amended and Restated Registration Rights
Agreement also provides that the Company will pay certain expenses relating to such registrations and indemnify the stockholders signatories
thereto against (or make contributions in respect of) certain liabilities that may arise under the Securities Act of 1933, as amended
(the “Securities Act”).
This description of the Amended and Restated Registration
Rights Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Amended and Restated
Registration Rights Agreement, the form of which is attached hereto as Exhibit 10.2 and is incorporated herein by reference.
Item 2.01 Completion of Acquisition or Disposition
of Assets.
The disclosure set forth in this Current Report
on Form 8-K under “Introductory Note” is incorporated in this Item 2.01 by reference.
At the effective time of the Merger (the “Effective
Time”), the outstanding shares of Molekule common stock, par value $0.0001, that were issued and outstanding immediately prior
to the effective time of the Merger (the “Molekule Common Stock”) (including shares of Molekule Common Stock resulting
from the conversion of Molekule’s eligible preferred stock, but excluding dissenting shares and shares held in treasury), were
converted automatically into, and the holders of such shares of Molekule Common Stock were entitled to receive, by virtue of the Merger
and upon the terms and subject to the conditions set forth in the Merger Agreement, 14,907,210 fully paid and nonassessable shares of
Company common stock, par value $0.01 per share (the “Company Common Stock”), that resulted in the Molekule stockholders
in the aggregate, after taking into account the Company Common Stock underlying In-the-Money Company Warrants (as defined in the Merger
Agreement) and the grants of restricted stock units (“RSUs”) by the Company to certain continuing Molekule employees
which were deemed vested and outstanding as of immediately following the Effective Time, holding 49.5% of the Outstanding Shares (as
defined in the Merger Agreement) (the "Merger Consideration"). Immediately following the Closing, there were 30,427,750 shares
of Company Common Stock outstanding, which does not include Company Common Stock that may be issued upon the vesting of RSUs.
At the Effective Time, each in-the-money Molekule
warrant, by virtue of the Merger and without further action on the part of the holder thereof, converted into the right to receive, for
each share of Molekule Common Stock subject to such in-the-money Molekule warrant (including shares of Molekule Common Stock issuable
upon conversion of any Molekule preferred stock issuable upon exercise of any Molekule warrant), a portion of the Merger Consideration
equal to the Merger Consideration that would have been payable in respect of such share had such in-the-money Molekule warrant been exercised
immediately prior to the Effective Time less the exercise price with respect to such warrant. Each Molekule warrant issued and outstanding
as of the Effective Time that was not an in-the-money Molekule warrant was automatically cancelled and terminated for no consideration
immediately prior to the Effective Time.
At the Effective Time, each outstanding option
to acquire Molekule Common Stock was cancelled and terminated for no consideration. Any shares of Molekule Common Stock that were available
for issuance pursuant to Molekule’s 2015 stock plan (the “Residual Shares”) were converted at the Effective Time
into the number of shares of Company Common Stock equal to the product of the number of such Residual Shares and the exchange ratio determined
in accordance with the Merger Agreement (the “Assumed Shares”). The Company may issue the Assumed Shares after the
Effective Time pursuant to the settlement of any equity awards granted under the Molekule 2015 stock plan, AeroClean’s 2021 Incentive
Award Plan or any other AeroClean equity plan.
Item 2.03 Creation of a Direct Financial Obligation
or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The disclosure set forth in this Current Report
on Form 8-K under “Introductory Note” and Item 2.01 is incorporated in this Item 2.03 by reference.
Prior to the Effective Date, Molekule was a party
to (i) an amended and restated loan and security agreement dated August 29, 2019 (as amended, the “Senior Term Loan”)
with Silicon Valley Bank (“SVB”) and (ii) a mezzanine loan and security agreement dated March 22, 2021 (as
amended, the “Mezzanine Term Loan” and, together with the Senior Term Loan, the “Loan Agreements”)
also with SVB. As of September 30, 2022, an aggregate principal amount of approximately $34,400,000 was outstanding under the Loan
Agreements. SVB consented to the Merger under both Loan Agreements, provided that, as a condition to such consent, AeroClean was required
to become a co-borrower under each Loan Agreement at Closing and grants SVB a first priority lien on substantially all of AeroClean’s
assets, other than certain customary excluded assets. On January 12, 2023, AeroClean executed a joinder agreement, became a co-borrower
under each Loan Agreement and granted SVB a first priority lien on substantially all of AeroClean’s assets, other than certain customary
excluded assets. In addition, SVB’s consent was conditioned upon AeroClean having unrestricted and unencumbered cash of at least
$20,000,000 at the Closing; this condition was satisfied as of the Closing.
The Senior Term Loan provides for a term loan
facility of which approximately $4.4 million was outstanding at September 30, 2022 (the “Term Loan Advances”).
The Senior Term Loan has a stated maturity date of April 1, 2026. In addition, the co-borrowers are required to pay a certain deferral
fee in the amount of $380,000, which is payable upon the earlier of (i) April 1, 2026, (ii) termination of the Senior Term
Loan, or (iii) the payment in full of the Term Loan Advances. The principal amount outstanding under the Senior Term Loan accrues
interest at a floating per annum rate equal to the greater of (i) the Prime Rate plus 1.00% and (ii) 4.25%. The co-borrowers
are required to pay interest monthly and repay the principal amount of the Term Loan Advances in 36 equal monthly installments commencing
May 1, 2023.
The Mezzanine Term Loan provides for two mezzanine
term loans in the aggregate principal amount of $30,000,000 outstanding as of September 30, 2022, including (i) a tranche of
$15,000,000 with a maturity date of March 1, 2027 (the “Mezzanine Term Loan A Tranche”) and (ii) a tranche
of $15,000,000 with a maturity date of March 1, 2028 (the “Mezzanine Term Loan B Tranche”). The co-borrowers are
required to pay interest monthly and to repay the Mezzanine Term Loan in monthly installments beginning (i) with respect to the Mezzanine
Term Loan A Tranche, April 1, 2024, and (b) with respect to the Mezzanine Term Loan B Tranche, April 1, 2025.
The Loan Agreements are secured by a first priority
lien on substantially all of AeroClean’s and Molekule’s assets (other than certain customary excluded assets) and contains
customary events of default and covenants that restrict AeroClean’s and Molekule’s ability to, among other things, incur additional
indebtedness, other than permitted indebtedness, enter into mergers or acquisitions, sell or otherwise dispose of assets, pay dividends,
or repurchase stock, subject to customary exceptions.
Each of the Senior Term Loan and the Mezzanine
Term Loan contain a financial covenant which, after the Closing, will require the co-borrowers to maintain in the aggregate, at all times,
and be tested as of any day, unrestricted and unencumbered cash and cash equivalents of at least $2,000,000. In addition, the co-borrowers
will be required to attain, in the aggregate, a net revenue of (i) $50,000,000 for the calendar year ending December 31, 2023
and (ii) with respect to future annual periods, net revenue levels reasonably agreed between Molekule and SVB prior to February 28
of each calendar year thereafter.
In addition, Molekule is a party to a master lease
agreement with Trinity. As of September 30, 2022, an aggregate amount of approximately $2,200,000 was owed under this agreement.
Trinity has consented to the Merger, so long as AeroClean became a co-lessee under the agreement at and after Closing. On January 12,
2023, AeroClean executed a joinder to the master lease agreement with Trinity.
Item 5.02 Departure of Directors or Certain
Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
The disclosure set forth in this Current Report
on Form 8-K under “Introductory Note,” Item 1.01 and Item 2.01 is incorporated in this Item 5.02 by reference.
Pursuant to the terms of the Stockholders Agreement,
on January 12, 2023, the Company Board increased the size of the Company Board from seven members to eight members and filled the
resulting vacancy on the Company Board by appointing Brad Feld (who was designated by Molekule) as a director of the Company, with a term
to expire at the Company’s 2023 annual meeting of stockholders or until his successor is elected and qualified or until his earlier
resignation or removal. Pursuant to the Stockholders Agreement, certain stockholders of AeroClean and Molekule agreed to take all reasonable
actions to nominate Mr. Feld (and the existing members of the AeroClean board of directors) to be members of the board of directors
of the Company following the Closing and until immediately after the Company’s 2024 annual meeting of stockholders. Mr. Feld
has not been appointed to any committees of the Company Board at this time. However, the Company expects that he will be appointed to
one or more Board committees in the future.
Except as provided for in the Stockholders Agreement
as described above, there are no arrangements or understandings between Mr. Feld and any other person pursuant to which Mr. Feld
was appointed a director of the Company, and Mr. Feld has no direct or indirect material interest in any transaction required to
be disclosed pursuant to Item 404(a) of Regulation S-K.
Following the Closing, Mr. Feld received a one-time initial grant
of 92,000 RSUs. The RSUs vest in three annual installments beginning on January 12, 2023, subject to Mr. Feld’s continued
service to the Company. In addition, Mr. Feld will be eligible to receive annual equity awards covering Company Common Stock on the
same basis as other non-employee directors of the Company. It is expected that Mr. Feld will execute the Company’s standard
form of indemnification agreement with non-employee directors and officers.
As previously reported in the Current Report
on Form 8-K filed with the SEC on October 4, 2022, effective upon the Closing, the Company Board appointed Jonathan Harris
as Chief Marketing & Product Development Officer of the Company and Ritankar “Ronti” Pal as Chief Operating
Officer of the Company and each such individual entered into an employment agreement with the Company providing for certain
compensation and benefits as described therein. The descriptions of Mr. Harris’ and Mr. Pal’s employment
agreements are set forth on page 112 and 113 of the Information Statement/Prospectus, in the section entitled “Interests
of Molekule’s Directors and Executive Officers in the Merger,” and such information is hereby incorporated by reference
into this Item 5.02. In addition, the Executive Employment Agreement by and among Jonathan Harris and AeroClean
Technologies, Inc., dated October 3, 2022, and the Executive Employment Agreement by and among Ritankar Pal and AeroClean
Technologies, Inc., dated October 3, 2022, are filed as Exhibit 10.5 and Exhibit 10.7, respectively, hereto and
are incorporated herein by reference. On January 12, 2023, the Company amended Mr. Harris's employment agreement to change his title
from Chief Marketing & Product Development Officer to Chief Commercial Officer. The Amendment to the Executive Employment
Agreement by and among Jonathan Harris and Molekule Group, Inc., dated January 12, 2023 is filed as Exhibit 10.6 and is incorporated
herein by reference. Except as disclosed in the Information Statement/Prospectus under the section entitled “Interests of
Molekule’s Directors and Executive Officers in the Merger,” which is incorporated by reference into this Item 5.02,
there are no arrangements or understandings between Mr. Harris or Mr. Pal and any other persons pursuant to which
Mr. Harris or Mr. Pal was appointed an officer. Neither Mr. Harris nor Mr. Pal have any family relationship with
any director or other executive officer of the Company or any person nominated or chosen by the Company to become a director or
executive officer. Mr. Harris and Mr. Pal have no direct or indirect material interest in any transaction required to be
disclosed pursuant to Item 404(a) of Regulation S-K.
In addition, as previously reported in the Current Report on Form 8-K filed with the SEC on October 4, 2022, the Company entered into amended and restated employment agreements
with each of Jason DiBona and Ryan Tyler, pursuant to which each such executive will continue as the Chief Executive Officer and Chief
Financial Officer, respectively, effective as of the Closing (the “Amended and Restated Employment Agreements”). The
descriptions of such Amended and Restated Employment Agreements are set forth on page 110 and 111 of the Information Statement/Prospectus,
in the section entitled “Interests of AeroClean’s Directors and Executive Officers in the Merger,” and such information
is hereby incorporated by reference into this Item 5.02. In addition, the Amended and Restated Employment Agreements are filed as Exhibit 10.3
and Exhibit 10.4, hereto and are incorporated herein by reference.
Each of Mr. Feld’s, Mr. Harris’
and Mr Pal’s ages and biographical information are set forth on page 132 of the Information Statement/Prospectus, in the section
entitled “Management of the Combined Company Following the Merger,” and such biographical information is hereby incorporated
by reference into this Item 5.02.
Item 5.03 Amendments to Articles of Incorporation
or Bylaws; Change in Fiscal Year.
The disclosure set forth in this Current Report
on Form 8-K under “Introductory Note” and Item 2.01 is incorporated in this Item 5.03 by reference.
On January 12, 2023, in connection with the
consummation of the Merger, and subsequent thereto, AeroClean amended its certificate of incorporation to change the name of the Company
to “Molekule Group, Inc.” and include a provision exculpating the officers of the Company from liability for breaches
of fiduciary duty to the extent permitted by Delaware law (the “Amended and Restated Certificate of Incorporation”).
The Amended and Restated Certificate of Incorporation of the Company, as amended, are filed as Exhibit 3.1 and Exhibit 3.2,
respectively, hereto and are incorporated herein by reference.
On January 12, 2023, the Company Board amended
and restated the Company’s Bylaws (the “Second Amended and Restated Bylaws”) to reflect the change of the Company’s
name to “Molekule Group, Inc.” and include a six-month lockup provision that prohibits the former Molekule stockholders
from transferring their Merger Consideration during the six-month period following the Closing. The full text of the Second Amended and
Restated Bylaws is filed as Exhibit 3.3 hereto and is incorporated herein by reference. Following the Closing, the Company Common
Stock continued to trade on Nasdaq, but is now trading under the ticker symbol “MKUL.” The CUSIP number for the Company’s
Common Stock will not change.
Item 8.01 Other Information.
On January 12, 2023, the Company issued a press release announcing
the Closing and the adoption of the Company’s new name. The full text of the press release is filed as Exhibit 99.1 hereto
and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(a) Financial Statements of Businesses or Funds Acquired.
The consolidated financial statements of Molekule for the years ended
December 31, 2021 and 2020 are set forth in the Information Statement/Prospectus beginning on page F-35 and are incorporated
herein by reference. The unaudited condensed consolidated financial statements of Molekule for the nine months ended September 30,
2022 and 2021 are set forth in the Information Statement/Prospectus beginning on page F-61 and are incorporated herein by reference.
(b) Pro Forma Financial Information.
The unaudited pro forma condensed combined statements
of operations of AeroClean and Molekule for the fiscal year ended December 31, 2021 and the nine months ended September 30,
2022 and the unaudited pro forma condensed combined balance sheet as of September 30, 2022 are set forth in the Information Statement/Prospectus
at pages 75 to 83 and are incorporated herein by reference.
(d) Exhibits.
EXHIBIT INDEX
| Exhibit No. |
Description |
| 2.1* |
Agreement and Plan of Merger, dated October 3, 2022 (incorporated by reference Exhibit 2.1 of the Current Report on Form 8-K filed on October 4, 2022). |
| 3.1 |
Amended and Restated Certificate of Incorporation of AeroClean Technologies, Inc. dated January 12, 2023. |
| 3.2 |
Certificate of Amendment of Amended and Restated Certificate of Incorporation, dated January 12, 2023. |
| 3.3 |
Second Amended and Restated Bylaws of Molekule Group, Inc., dated January 12, 2023. |
| 10.1* |
Stockholders Agreement, dated January 12, 2023. |
| 10.2 |
Amended and Restated Registration Rights Agreement, dated January 12, 2023. |
| 10.3†* |
Amended and Restated Employment Agreement by and among Jason DiBona and AeroClean Technologies, Inc., dated October 3, 2022 (incorporated by reference Exhibit 10.5 of the Current Report on Form 8-K filed on October 4, 2022). |
| 10.4†* |
Amended and Restated Employment Agreement by and among Ryan Tyler and AeroClean Technologies, Inc., dated October 3, 2022 (incorporated by reference Exhibit 10.6 of the Current Report on Form 8-K filed on October 4, 2022). |
| 10.5†* |
Executive Employment Agreement by and among Jonathan Harris and AeroClean Technologies, Inc., dated October 3, 2022 (incorporated by reference Exhibit 10.7 of the Current Report on Form 8-K filed on October 4, 2022). |
| 10.6† |
Amendment to the Executive Employment Agreement by and among Jonathan Harris and Molekule Group, Inc., dated January
12, 2023. |
| 10.7†* |
Executive Employment Agreement by and among Ritankar Pal and AeroClean Technologies, Inc., dated October 3, 2022 (incorporated by reference Exhibit 10.8 of the Current Report on Form 8-K filed on October 4, 2022). |
| 23.1 |
Consent of PricewaterhouseCoopers LLP, Independent Accountants for Molekule, Inc. |
| 99.1 |
Press Release, dated January 12, 2023. |
| 104 |
Cover Page Interactive Data File – the cover page XBRL tags are embedded within the Inline XBRL document. |
† Management Compensation Agreement
* Schedules and exhibits have been omitted
pursuant to Item 601(b)(2) of Regulation S-K. The Company hereby undertakes to furnish supplementally copies of any of
the omitted schedules and exhibits upon request by the SEC.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| |
MOLEKULE GROUP, INC. |
| |
|
| Dated: January 12, 2023 |
By: |
/s/ Jason DiBona |
| |
|
Name: |
Jason DiBona |
| |
|
Title: |
Chief Executive Officer |
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