F-Star Therapeutics Limited executed term sheet to acquire Spring Bank Pharmaceuticals, Inc. (NasdaqCM:SBPH) for $90.6 million in a reverse merger transaction on June 15, 2020. F-Star Therapeutics Limited entered into a definitive agreement to acquire Spring Bank Pharmaceuticals, Inc. in a reverse merger transaction on July 29, 2020. The transaction is structured as Spring Bank acquiring all the shares of F-Star in exchange of for newly issued shares of Spring Bank at an exchange ratio of 0.5577 in an all-stock transaction. Post the transaction, Spring Bank equity holders and F-star equity holders will own approximately 47.5% and 52.5%, respectively, of the combined company calculated on a fully diluted basis using the treasury stock method and, in the case of Spring Bank, excluding out-of-the-money options and warrants. The actual ownership allocation will be subject to adjustment based on Spring Bank's net cash balance at the closing of the transaction. In addition to retaining equity ownership of the combined company, Spring Bank stockholders of record as of the close of the combination will have the opportunity to obtain potential future value in the form of two CVRs associated with Spring Bank's ongoing Spring Bank SB 11285 IV clinical program and Spring Bank's STING antagonist research platform. Subject to the terms of the first CVR agreement for the STING agonist clinical program, if one or more strategic transactions are consummated for SB 11285 by the combined company during a period. Subject to the terms of the second CVR agreement, if a potential development agreement is consummated and one or more strategic transactions are consummated for the STING antagonist research platform by the combined company during the seven (7)-year period following the closing of the combination, those equity holders of Spring Bank will receive 80% of the net proceeds from such transactions. On a pro forma basis and assuming that the proceeds of the concurrent F-star financing will be $15 million. Post the transaction, Spring Bank will be re-named as F-star Therapeutics, Inc. and is expected to trade on the Nasdaq Capital Market under the ticker symbol “FSTX”. The exchange agreement contains certain termination rights for both Spring Bank Pharmaceuticals and F-star, and further provides that upon termination of the exchange agreement under specified circumstances, the terminating party may be required to pay the other party a termination fee of $2 million.

Effective as of the closing of the transaction, Eliot Forster will be the President and Chief Executive Officer, Darlene Deptula-Hicks will be Chief Financial Officer and Treasurer, Neil Brewis will be Chief Scientific Officer, and Louis Kayitalire will be Chief Medical Officer, of the combined company. Senior members of the current F-star and Spring Bank teams will be asked to become a part of the key leadership team of the combined company. Martin Driscoll, President and Chief Executive Officer of Spring Bank, will not be a member of the leadership team of the combined company. The Board of Directors of the combined company will initially consist of eight Directors. Of the current F-star Board, Eliot Forster, Nessan Bermingham, Edward Benz, Geoffrey Race, Patrick Krol, and from the current Spring Bank Board, David Arkowitz, Todd Brady, and Pamela Klein will continue as members of the combined company's Board of Directors. The Spring Bank directors and officers have signed support agreements committing them to vote in favor of the transaction. These same parties, as well F-star's key equity holders, directors and officers, have signed lock-up agreements restricting transfers of the combined company's stock (except as to any shares purchased by such holders in the financing closing immediately prior to the business combination) for 180 days post-closing. The combined company will be headquartered out of F-star's existing facilities in Cambridge, United Kingdom and Cambridge, Massachusetts.

The transaction is subject to shareholders approval of Spring Bank Pharmaceuticals, registration statement shall have become effective, shares of Spring Bank Pharmaceuticals, Inc. common stock to be issued in connection with the transaction shall be approved for listing on Nasdaq, all foreign antitrust approvals, Spring Bank Pharmaceuticals Lock-up agreements shall be in full force and effect and shall continue to be in full force and effect immediately following the closing, Spring Bank Pharmaceuticals shall have effected Spring Bank Pharmaceuticals reverse stock split and provided F-Star with a file-stamped copy of the amendment to company's certificate of Incorporation effecting Spring Bank Pharmaceuticals reverse stock split and F-Star will have received a duly executed copy of a resignation letter from each of the resigning members of the Board of Directors of Spring Bank Pharmaceuticals and the resigning officers of Spring Bank Pharmaceuticals listed. The transaction has been approved by the Boards of Directors of F-Star Therapeutics and Spring Bank Pharmaceuticals and also the equity holders of F-star. As of November 19, 2020, the transaction received approval from the shareholders of Spring Bank Pharmaceuticals.

The transaction is expected to close in late 2020. As of July 30, 2020, the transaction is expected to close in fall 2020. As per the filing dated October 20, 2020, the transaction is expected to close on or about November 20, 2020. As per the filing dated November 3, 2020, the transaction is expected to close in fourth quarter of 2020. As of November 6, 2020, Spring Bank intends to declare a one-time special dividend on each outstanding share of Spring Bank's common stock, payable on a post-reverse stock split basis following the reverse stock split, in the form of contractual rights to receive one contingent value right. The special dividend is expected to be payable immediately prior to the closing of Spring Bank's proposed combination with F-star Therapeutics, which is currently expected to be consummated on November 20, 2020.

Ladenburg Thalmann & Co. Inc. acted as financial advisor and fairness opinion provider to Spring Bank Pharmaceuticals. John D. Hogoboom, Robert J. Paradiso, Brian A. Silikovitz, Andrew E. Graw and Christine Osvald-Mruz of Lowenstein Sandler LLP acted as legal advisor to Spring Bank Pharmaceuticals, and Heyman Enerio Gattuso & Hirzel LLP acted as legal advisor to the special committee of Spring Bank. The Proxy Advisory Group, LLC acted as proxy solicitor to Spring Bank. William C. Hicks and Matthew W. Tikonoff of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. alongside Stephen Hamilton, Jonathan Greenwood and Kristian Shearsby of Mills & Reeve LLP acted as legal advisors to F-Star Therapeutics. Spring Bank paid a fees of $0.025 million to The Proxy Advisory Group, $0.2 million to Ladenburg for providing fairness opinion, and for financial advisory, paid $0.15 million upfront to retain Ladenburg and $0.9 million will be paid at closing. Computershare Trust Company, NA is transfer agent and registrar for Spring Bank.

F-Star Therapeutics Limited completed the acquisition of Spring Bank Pharmaceuticals, Inc. (NasdaqCM:SBPH) in a reverse merger transaction on November 20, 2020. The combined company will start trading under the name F-star Therapeutics, Inc. from November 23, 2020.