SORRENTO THERAPEUTICS, INC. Form 8-K (Aug. 20, 2020)

Summary

Current report on Form 8-K for an event dated August 20, 2020, filed by Sorrento Therapeutics, Inc. Under Item 1.01, the report states that on August 20, 2020 the company entered into an Agreement and Plan of Merger with SmartPharm Therapeutics, Inc. and SP Merger Sub, Inc., providing for consideration of up to an aggregate of $19.4 million, subject to certain adjustments, payable in shares of common stock. Of the shares, $1.94 million will be placed in escrow, and the report states that the company must file a registration statement within 30 days of the closing of the merger. Henry Ji signed on August 20, 2020.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest
event reported): August 20,
2020

SORRENTO THERAPEUTICS, INC.

(Exact Name of Registrant as Specified
in its Charter)

Delaware | 001-36150 | 33-0344842
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.)

4955 Directors Place

San Diego , CA 92121

(Address of Principal Executive Offices)
(Zip Code)

Registrant’s telephone number,
including area code: ( 858 ) 203-4100

N/A

(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 | Name of each exchange on which registered
Common Stock, $0.0001 par value | SRNE | 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 ¨

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. ¨

Item 1.01. Entry into a Material Definitive
Agreement.

On August 20, 2020, Sorrento Therapeutics,
Inc. (the “Company”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) with SmartPharm
Therapeutics, Inc., a Delaware corporation (“SmartPharm”), SP Merger Sub, Inc., a Delaware corporation and wholly owned
subsidiary of the Company (“Merger Sub”), and John C. Thomas, Jr., as representative of the stockholders of SmartPharm
(the “Stockholders’ Representative”). The Merger Agreement provides for the merger of Merger Sub with and
into SmartPharm (the “Merger”), with SmartPharm surviving as a wholly owned subsidiary of the Company.

The total value of the consideration payable
to the holders of capital stock of SmartPharm (the “SmartPharm Stockholders”) in the Merger is up to an aggregate of $19.4 million,
subject to certain adjustments (the “Consideration”).

Pursuant to the Merger Agreement, the Company
will issue to the SmartPharm Stockholders up to an aggregate number of shares of common stock of the Company, par value $0.0001
per share (“Common Stock”), equal to the Consideration (the “Shares”), based on a price per share equal
to the average of the volume weighted average closing price per share of the Common Stock, as reported on The Nasdaq Stock Market
LLC (“Nasdaq”) for the 11 consecutive trading days’ period beginning on August 13, 2020 and ending on August
27, 2020 (the “Stock Price”); provided that in no event shall such Stock Price be less than 80%, nor greater than 120%,
of the closing price per share of the Common Stock, as reported on Nasdaq, on August 20, 2020; provided, further, that in the event
the Company believes in its reasonable discretion that a SmartPharm Stockholder is not an “accredited investor” as
defined in Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as amended (the “Securities Act”),
the Company may, in its discretion, pay the portion of the Consideration payable to such SmartPharm Stockholder in the form of
cash. A portion of the Consideration otherwise payable to the SmartPharm Stockholders will be set aside for expenses incurred by
the Stockholders’ Representative and $1.94 million of the Shares otherwise issuable to the holders of SmartPharm common stock
will be placed in escrow to satisfy certain rights of the Company, including indemnification rights, arising under the Merger Agreement.

The closing of the Merger is subject to
the adoption of the Merger Agreement by the affirmative vote of holders of a majority of the outstanding shares of common stock
and Series A preferred stock (on an as-converted basis) of SmartPharm, voting together as a single class. The closing of the Merger
is also subject to various customary conditions, including the accuracy of the representations and warranties contained in the
Merger Agreement (subject to certain materiality qualifiers) and compliance with covenants and agreements in the Merger Agreement
in all material respects.

The Merger Agreement contains customary
representations, warranties and covenants of the Company and SmartPharm. Subject to certain customary limitations, the SmartPharm
Stockholders have agreed to indemnify the Company and its officers, directors, employees and other authorized agents against certain
losses related to, among other things, breaches of SmartPharm’s representations and warranties, certain specified liabilities
and the failure to perform covenants or obligations under the Merger Agreement.

In connection with the Merger, the Company
also agreed, pursuant to the Merger Agreement, to prepare and file a registration statement on Form S-3 with the Securities and
Exchange Commission (the “SEC”) for the purpose of registering for resale the Shares. Under the Merger Agreement, the
Company must file a registration statement with the SEC within 30 days of the closing of the Merger.

The foregoing summary of the Merger Agreement
does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement that is
filed herewith as Exhibit 2.1.

The representations, warranties and covenants
contained in the Merger Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit
of the parties to the Merger Agreement, and may be subject to limitations agreed upon by the contracting parties. Accordingly,
the Merger Agreement is incorporated herein by reference only to provide investors with information regarding the terms of the
Merger Agreement, and not to provide investors with any other factual information regarding the Company or its business, and should
be read in conjunction with the disclosures in the Company’s periodic reports and other filings with the SEC.

Item 3.02. Unregistered Sale of Securities.

The information set forth in Item 1.01
of this Current Report on Form 8-K is incorporated herein by reference into this Item 3.02 in its entirety. The Shares will be
issued to accredited SmartPharm Stockholders in a transaction exempt from registration under the Securities Act in reliance on
Section 4(a)(2) thereof and Rule 506 of Regulation D thereunder. Each accredited SmartPharm Stockholder will represent that such
accredited SmartPharm Stockholder is an “accredited investor,” as defined in Regulation D, and will acquire the Shares
for investment only and not with a view towards, or for resale in connection with, the public sale or distribution thereof. Accordingly,
the Shares have not been registered under the Securities Act and the Shares may not be offered or sold in the United States absent
registration or an exemption from registration under the Securities Act and any applicable state securities laws. Neither this
Current Report on Form 8-K nor the exhibits attached hereto is an offer to sell or the solicitation of an offer to buy shares of
Common Stock or any other securities of the Company.

Item 8.01. Other Events.

On August 20, 2020, the Company issued
a press release announcing entry into the Merger Agreement. A copy of the press release is filed herewith as Exhibit 99.1 to this
Current Report on Form 8-K and is incorporated herein by reference.

Item 9.01. Financial Statements and
Exhibits.

(d) Exhibit.

2.1+ | Agreement and Plan of Merger, dated August 20, 2020, by and among Sorrento Therapeutics, Inc., SP Merger Sub, Inc., SmartPharm Therapeutics, Inc. and John C. Thomas, Jr., as representative of the stockholders of SmartPharm Therapeutics, Inc.
99.1 | Press Release dated August 20, 2020.
104 | Cover Page Interactive Data File, formatted in Inline Extensible Business Reporting Language (iXBRL).
+ | Non-material
schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Registrant hereby undertakes to furnish
supplemental copies of any of the omitted schedules and exhibits upon request by the SEC.

SIGNATURES

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.

SORRENTO THERAPEUTICS, INC.
Date: August 20, 2020 | By: | /s/ Henry Ji, Ph.D.
Name: Henry Ji, Ph.D.
Title: Chairman of the Board, President and Chief Executive Officer

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