424B3 1 form424b3.htm

 

Filed Pursuant to Rule 424(b)(3)

Registration No. 333-252181

 

JOINT PROXY AND CONSENT SOLICITATION STATEMENT/PROSPECTUS

 

 

MERGER PROPOSED — YOUR VOTE IS VERY IMPORTANT

 

To the Stockholders of Akers Biosciences, Inc. and MyMD Pharmaceuticals, Inc.:

 

On November 11, 2020, Akers Biosciences, Inc. (“Akers”), XYZ Merger Sub Inc., a wholly owned subsidiary of Akers (“Merger Sub”), and MyMD Pharmaceuticals, Inc. (“MYMD”) entered into an Agreement and Plan of Merger and Reorganization, as amended (as may be amended from time to time, the “Merger Agreement”), which provides for, among other things, the merger of Merger Sub with and into MYMD, with MYMD continuing as the surviving corporation and a wholly owned subsidiary of Akers, on the terms and conditions set forth in the Merger Agreement. Upon completion of the merger, the combined company is expected to be renamed MyMD Pharmaceuticals, Inc. The boards of directors of each of Akers and MYMD have approved the Merger Agreement and the transactions contemplated by the Merger Agreement, including the merger.

 

If the merger is completed, (i) holders of outstanding shares of MYMD common stock (referred to herein as the MYMD stockholders) will be entitled to receive (x) the number of shares of Akers common stock per share of MYMD common stock they hold at the exchange ratio, as calculated in accordance with the Merger Agreement (the “Exchange Ratio”), prior to giving effect to the proposed reverse stock split discussed below, or an aggregate of approximately 58,821,708 shares of Akers common stock at closing using the assumed Exchange Ratio of 0.7950 (which is subject to change depending on the net amount of cash Akers has and the number of outstanding securities of Akers and MYMD at the effective time of the merger), (y) an amount in cash, on a pro rata basis, equal to the aggregate cash proceeds received by Akers from the exercise of any options to purchase MYMD common stock assumed by Akers upon closing of the merger prior to the second-year anniversary of the closing of the merger (the “Option Exercise Period”), such payment to occur not later than 30 days after the last day of the Option Exercise Period, and (z) potential milestone payments in shares of Akers common stock (“Milestone Payments”) up to the number of merger consideration shares issued by Akers to MYMD stockholders at the closing of the merger (“Milestone Shares”) payable upon achievement of certain market capitalization milestone events during the 36-month period immediately following the closing of the merger (the “Milestone Period”); and (ii) each outstanding option to purchase MYMD common stock that has not previously been exercised prior to the closing of the merger, whether or not vested, will be assumed by Akers subject to certain terms contained in the Merger Agreement.

 

Immediately upon completion of the merger and the transactions contemplated in the Merger Agreement (i) MYMD stockholders and optionholders will own approximately 80% of the fully diluted equity of the combined company excluding certain warrants and subject to adjustment based on Akers’ net cash at closing, as further described under “THE MERGER — General” in this joint proxy and consent solicitation statement/prospectus; and (ii) current Akers stockholders and holders of certain outstanding options and warrants to purchase shares of Akers common stock (excluding shares issuable upon exercise of options and warrants having an exercise price in excess of $1.72, prior to giving effect to any stock splits, combinations, reorganizations and the like with respect to the Akers common stock between the announcement of the merger and the closing of the merger) and holders of outstanding restricted stock units will own the balance of the fully diluted equity of the combined company. Immediately following the merger, subject to the approval of the current Akers stockholders, it is anticipated that the combined company will effect a reverse stock split at a ratio between 1-for-1.5 and 1-for-20 with respect to its issued and outstanding common stock. The reverse stock split will increase Akers’ stock price to at least $5.00 per share.

 

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Akers common stock is currently listed on The Nasdaq Capital Market (also referred to herein as “Nasdaq”) under the symbol “AKER”. On November 11, 2020, the last full trading day before the announcement of the merger, the last reported sale price of Akers common stock was $1.72 per share, and, on March 22, 2021, the latest practicable date prior to the date of this joint proxy and consent solicitation statement/prospectus, the last reported sale price of Akers common stock was $3.52 per share. Akers and MYMD urge you to obtain current market quotations for the price of Akers common stock.

 

Each of Akers and MYMD expects that the merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”).

 

Akers will hold a special meeting of its stockholders, while MYMD will solicit its stockholders’ approval by written consent. Akers stockholders will be asked to consider and vote upon the following proposals: (i) to approve, for purposes of complying with Nasdaq Listing Rule 5635(a), the issuance of shares of Akers common stock to MYMD stockholders and other parties in connection with the merger, the Merger Agreement, and the transactions contemplated thereby or in connection therewith (the “Share Issuance Proposal”), (ii) to approve an amendment to the amended and restated certificate of incorporation of the combined company, which will be in effect at the effective time of the merger (the “A&R Charter”) to effect a reverse stock split at the discretion of the Akers Board of Directors with a ratio between 1-for-1.5 and 1-for-20 with respect to the issued and outstanding common stock of the combined company immediately following the merger (the “Reverse Stock Split Proposal”), (iii) to approve the amended and restated certificate of incorporation of Akers which will be in effect upon consummation of the merger (the “A&R Charter Proposal”), including, among other things, changing the name of the combined company to MyMD Pharmaceuticals, Inc., (iv) to approve the Akers Biosciences, Inc. 2021 Equity Incentive Plan (the “Incentive Plan Proposal”), (v) to approve, on a non-binding advisory basis, the compensation that may be paid or become payable to Akers’ named executive officers in connection with the merger (the “Akers Golden Parachute Compensation Proposal”), (vi) to approve the contribution to Oravax Medical Inc. (“Oravax”) of (a) an amount in cash equal to $1,500,000, and, (b) cause Cystron Biotech, LLC (“Cystron”) to assign to Oravax substantially all of its assets, including the Amended and Restated License Agreement, dated March 19, 2020, between Cystron and Premas whereby Premas granted Cystron, amongst other things, an exclusive license with respect to Premas’ vaccine platform for the development of a vaccine against SARS-CoV-2, (the “License Agreement”), in exchange for a number of shares of Oravax’s capital stock equivalent to 13% of Oravax’s then outstanding capital stock on a fully diluted basis (the “Contribution Proposal”) pursuant to the Contribution and Assignment Agreement, dated March 18, 2021, by and among Akers, Cystron, and Oravax, as it may be amended from time to time (the “Contribution and Assignment Agreement”), and (vii) to adjourn the special meeting, if necessary, to permit the solicitation of additional proxies in the event that there are insufficient votes on one or more of the proposals presented to Akers stockholders (the “Adjournment Proposal”).

 

The Akers special meeting will be held on April 15, 2021 at 10:00 a.m., Eastern Time, and will be “virtual,” meaning that you can participate in the meeting online at www.virtualshareholdermeeting.com/AKER2021SM at the appointed time and date and entering the control number included in the proxy card that you receive. Akers stockholders are encouraged to access the special meeting before the start time. Please allow ample time for online check-in. Akers stockholders will not be able to attend the special meeting in person.

 

MYMD stockholders will be asked to approve by written consent a proposal to adopt and approve the Merger Agreement and the transactions contemplated thereby, including the merger (the “MYMD Merger Proposal”).

 

Completion of the merger is conditioned upon satisfaction or waiver of all closing conditions under the Merger Agreement, including, among other things, (i) the approval of the Stock Issuance Proposal, the approval of the Reverse Stock Split Proposal, the approval of the A&R Charter Proposal, and the approval of the Contribution Proposal, which require the affirmative vote of a majority of the votes cast by those shares entitled to vote on such matter, and (ii) the adoption and approval of the MYMD Merger Proposal by written consent of the holders of a number of shares of MYMD common stock representing at least seventy five percent (75%) of the issued and outstanding shares of MYMD common stock.

 

Akers’ board of directors has determined that it is advisable and in the best interest of Akers and its stockholders to enter into the Merger Agreement, and the Akers board of directors has authorized and approved the terms of the Merger Agreement and the transactions contemplated thereby and recommends that Akers stockholders vote “FOR” the Share Issuance Proposal, “FOR” the Reverse Stock Split Proposal, “FOR” the A&R Charter Proposal, “FOR” the Incentive Plan Proposal, “FOR” the Akers Golden Parachute Compensation Proposal, “FOR” the Contribution Proposal, and “FOR” the Adjournment Proposal.

 

MYMD’s board of directors has (i) determined that the Merger Agreement and transactions contemplated thereby, including the merger, are advisable and fair to and in the best interests of MYMD and its stockholders, (ii) unanimously approved the Merger Agreement and the transactions contemplated thereby, including the merger and (iii) unanimously recommended that MYMD stockholders adopt and approve the Merger Agreement and the transactions contemplated thereby, including the merger, by written consent.

 

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This joint proxy and consent solicitation statement/prospectus provides you with important information about the special meeting and solicitation of written consents, Akers, MYMD, the proposed merger and the transactions and documents related to the merger. Please carefully read this entire joint proxy and consent solicitation statement/prospectus, including “RISK FACTORS” beginning on page 55.

 

For the Akers stockholders: your vote is very important. Whether or not you plan to attend the Akers special meeting, please take the time to vote by completing and returning the enclosed proxy card to Akers or by granting your proxy electronically over the Internet or by telephone. If your shares are held in “street name,” you must instruct your broker in order to vote on all proposals.

 

Sincerely,

 

/s/ Christopher Schreiber

  /s/ James A. McNulty 
Christopher Schreiber   James A. McNulty, CPA
Chief Executive Officer   Chief Executive Officer
Akers Biosciences, Inc.   MyMD Pharmaceuticals, Inc.

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the Akers common stock to be issued in the merger or determined if this joint proxy and consent solicitation statement/prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

 

This joint proxy and consent solicitation statement/prospectus is dated March 23, 2021 and is first expected to be mailed or otherwise delivered to the stockholders of Akers and MYMD on or about March 24, 2021.

 

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Akers Biosciences, Inc.

1185 Avenue of the Americas

3rd Floor

New York, New York 10036 

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON April 15, 2021

10:00 a.m. Eastern Time

To be Held Online at www.virtualshareholdermeeting.com/AKER2021SM

 

To the Stockholders of Akers Biosciences, Inc.:

 

NOTICE IS HEREBY GIVEN that a special meeting of the stockholders (the “special meeting”) of Akers Biosciences, Inc., a New Jersey corporation (“Akers,” “we,” “our,” or “us”), will be held on April 15, 2021, at 10:00 a.m., Eastern Time, and will be “virtual,” meaning that you can participate in the meeting online at www.virtualshareholdermeeting.com/AKER2021SM, to consider and vote upon the following matters:

 

(1) The Share Issuance Proposal — to approve, for purposes of complying with Nasdaq Listing Rule 5635(a), the issuance of shares of our common stock to MYMD stockholders as merger consideration in the merger of XYZ Merger Sub Inc., a Florida corporation and a wholly owned subsidiary of Akers (“Merger Sub”), with and into MyMD Pharmaceuticals, Inc., a Florida corporation (“MYMD”), including potential milestone payments in shares of our common stock up to the number of merger consideration shares issued by Akers to MYMD stockholders at the closing of the merger (“Milestone Shares”) payable upon achievement of certain market capitalization milestone events during the 36-month period immediately following the closing of the merger (the “Milestone Period”), pursuant to the terms and conditions of the Agreement and Plan of Merger and Reorganization, dated as of November 11, 2020, as amended, by and among Akers, Merger Sub and MYMD (the “Merger Agreement”), the Merger Agreement and the transactions contemplated thereby (the “Share Issuance Proposal”);

 

(2) The Reverse Stock Split Proposal — to approve an amendment to the amended and restated certificate of incorporation of the combined company, which will be in effect at the effective time of the merger (the “A&R Charter”) to effect a reverse stock split at the discretion of the Akers Board of Directors with a ratio between 1-for-1.5 and 1-for-20 with respect to the issued and outstanding common stock of the combined company immediately following the merger (the “Reverse Stock Split Proposal”);

 

(3) The A&R Charter Proposal — to approve the amendment and restatement of our certificate of incorporation in its entirety which will be in effect at the effective time of the merger (the “A&R Charter Proposal”);

 

(4) The Incentive Plan Proposal — to approve the Akers Biosciences, Inc. 2021 Equity Incentive Plan (the “Incentive Plan Proposal”).

 

(5) The Akers Golden Parachute Compensation Proposal — to approve, on a non-binding advisory basis, the compensation that may be paid or become payable to Akers’ named executive officers in connection with the merger (the “Akers Golden Parachute Compensation Proposal”);

 

(6) The Contribution Proposal — to approve the contribution to Oravax Medical Inc. (“Oravax”) of (a) an amount in cash equal to $1,500,000, and, (b) cause Cystron Biotech, LLC (“Cystron”) to assign to Oravax substantially all of its assets, including the Amended and Restated License Agreement, dated March 19, 2020, between Cystron and Premas whereby Premas granted Cystron, amongst other things, an exclusive license with respect to Premas’ vaccine platform for the development of a vaccine against SARS-CoV-2, (the “License Agreement”), in exchange for a number of shares of Oravax’s capital stock equivalent to 13% of Oravax’s then outstanding capital stock on a fully diluted basis (the “Contribution Proposal”) pursuant to the Contribution and Assignment Agreement, dated March 18, 2021, by and among Akers, Cystron, and Oravax, as it may be amended from time to time (the “Contribution and Assignment Agreement”); and

 

(7) The Adjournment Proposal — to consider and vote upon a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit the solicitation of additional proxies if, based upon the tabulated vote at the time of the special meeting, there are not sufficient votes to approve one or more proposals presented to stockholders for vote (the “Adjournment Proposal”).

 

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The Akers special meeting will be a virtual meeting via live webcast on the Internet. As an Akers stockholder, you will be able to attend the special meeting, vote and submit questions during the special meeting by visiting www.virtualshareholdermeeting.com/AKER2021SM and entering the control number included in the proxy card that you receive. If you are a “street name” holder, you must obtain a proxy from your broker or nominee in order to attend the special meeting and vote your shares. Akers stockholders are encouraged to access the special meeting before the start time of 10:00 a.m. Eastern Time on April 15, 2021. Please allow ample time for online check-in. Akers stockholders will not be able to attend the special meeting in person.

 

Our board of directors has fixed the close of business on March 15, 2021 as the record date for the special meeting. Only holders of record of shares of Akers capital stock at the close of business on such date are entitled to receive notice of, and vote at, the special meeting or at any postponement(s) or adjournment(s) of the special meeting. A complete list of our stockholders of record entitled to vote at the special meeting will be available for ten (10) days before the special meeting at our principal executive office for inspection by stockholders during ordinary business hours for any purpose germane to the special meeting. To the extent office access is impracticable due to the COVID-19 pandemic, you may email Karen Smith of Advantage Proxy, Inc., our proxy solicitor, at ksmith@advantageproxy.com for alternative arrangements to examine the stockholder list. The email should state the purpose of the request and provide proof of ownership of our voting securities as of the record date. The stockholder list will also be available online during the special meeting.

 

Approval of the Share Issuance Proposal, the Reverse Stock Split Proposal, the A&R Charter Proposal, the Incentive Plan Proposal, the Akers Golden Parachute Compensation Proposal, the Contribution Proposal, and the Adjournment Proposal each require the affirmative vote of a majority of the votes cast by those shares entitled to vote on such matter.

 

OUR BOARD OF DIRECTORS HAS DETERMINED THAT IT IS ADVISABLE AND IN THE BEST INTEREST OF AKERS AND ITS STOCKHOLDERS TO ENTER INTO THE MERGER AGREEMENT AND THE BOARD HAS AUTHORIZED AND APPROVED THE TERMS OF THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY. OUR BOARD OF DIRECTORS HAS APPROVED THE MERGER AGREEMENT AND RECOMMENDS THAT AKERS STOCKHOLDERS VOTE “FOR” THE SHARE ISSUANCE PROPOSAL, “FOR” THE REVERSE STOCK SPLIT PROPOSAL, “FOR” THE A&R CHARTER PROPOSAL, “FOR” THE INCENTIVE PLAN PROPOSAL, “FOR” THE AKERS GOLDEN PARACHUTE COMPENSATION PROPOSAL, “FOR” THE CONTRIBUTION PROPOSAL AND “FOR” THE ADJOURNMENT PROPOSAL.

 

Your vote is very important. If your shares are registered in your name as a stockholder of record of Akers, whether or not you expect to attend the special meeting, please sign and return the enclosed proxy card promptly in the envelope provided or promptly submit your proxy by telephone or over the Internet following the instructions on the proxy card, to ensure that your shares will be represented at the special meeting.

 

To participate in the virtual meeting, you will need the 16-digit control number that is printed in the box marked by the arrow on your proxy card. If your shares are held in the name of a bank, brokerage firm, or other nominee, you should follow the instructions provided by them in order to participate in the virtual meeting.

 

You may revoke a proxy at any time prior to its exercise at the meeting by following the instructions in the enclosed joint proxy and consent solicitation statement/prospectus. If you are a “street name” holder, your bank, broker or other nominee should provide instructions explaining how you may change or revoke your voting instructions.

 

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 15, 2021, TO BE HELD ONLINE AT www.virtualshareholdermeeting.com/AKER2021SM: This notice is not a form for voting and presents only an overview of the more complete joint proxy and consent solicitation statement/prospectus. We urge you to read the accompanying joint proxy and consent solicitation statement/prospectus, including its annexes and the section titled “RISK FACTORS” beginning on page 55, carefully and in their entirety. Copies of the joint proxy and consent solicitation statement/prospectus and the accompanying proxy card are available, without charge, on the internet, on our website www.akersbio.com, and can be obtained by sending an e-mail to investors@akersbio.com To obtain timely delivery, our stockholders must request the materials no later than five (5) business days prior to the Akers special meeting. If you have any questions concerning the merger, the Merger Agreement, the proposals, the Akers special meeting or the accompanying joint proxy and consent solicitation statement/prospectus or need help voting your shares of Akers capital stock, please contact Akers’ investor relations department at 843-399-7576.

 

  By Order of the Board of Directors,
   
  /s/ Joshua Silverman
  Joshua Silverman
  Chairman of the Board
   
March 23, 2021  

 

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MyMD Pharmaceuticals, Inc.
324 S. Hyde Park Ave., Suite 350
Tampa, FL 33606

NOTICE OF SOLICITATION OF WRITTEN CONSENT
FOR ACTION TO BE TAKEN BY WRITTEN CONSENT
IN LIEU OF A MEETING OF STOCKHOLDERS

 

To the Stockholders of MyMD Pharmaceuticals, Inc.:

 

Included in the accompanying joint proxy and consent solicitation statement/prospectus is a consent solicitation statement furnished by the board of directors of MyMD Pharmaceuticals, Inc., a Florida corporation (“MYMD”), to the holders of record of the outstanding shares of MYMD common stock (the “MYMD stockholders”), at the close of business on March 18, 2021 (the “record date”).

 

This joint proxy and consent solicitation statement/prospectus is being delivered to MYMD stockholders as of the record date, to solicit written consent to the adoption and approval of the Agreement and Plan of Merger and Reorganization, dated as of November 11, 2020, as amended (the “Merger Agreement”), by and among Akers Biosciences, Inc., a New Jersey corporation (“Akers”), XYZ Merger Sub Inc., a Florida corporation and a wholly owned subsidiary of Akers (“Merger Sub”), and MYMD, pursuant to which Merger Sub will merge with and into MYMD, with MYMD continuing as the surviving corporation and a wholly owned subsidiary of Akers, and to the transactions contemplated by the Merger Agreement, including the merger (the “MYMD Merger Proposal”).

 

As a MYMD stockholder on the record date, you are urged to complete, date and sign the enclosed written consent and promptly return the completed and executed written consent by one of the means described in “MYMD SOLICITATION OF WRITTEN CONSENT — Submission of Consents” beginning on page 138 of the enclosed joint proxy and consent solicitation statement/prospectus. MYMD’s board of directors has set April 10, 2021, as the target final date for receipt of written consents. MYMD reserves the right to extend the final date for receipt of written consents without any prior notice to stockholders.

 

The enclosed joint proxy and consent solicitation statement/prospectus describes the Merger Agreement and the proposed merger in detail and includes, as Annex A, the complete text of the Merger Agreement. We urge you to read the accompanying joint proxy and consent solicitation statement/prospectus, including all documents incorporated by reference into the accompanying joint proxy and consent solicitation statement/prospectus and its annexes carefully and in their entirety. In particular, you should carefully read the section captioned “RISK FACTORS” beginning on page 55 of the enclosed joint proxy and consent solicitation statement/prospectus for a discussion of certain risk factors relating to the Merger Agreement and the merger.

 

Approval of the MYMD Merger Proposal requires the written consent of holders of at least seventy-five percent (75%) of the outstanding shares of MYMD common stock.

 

In considering the recommendation of the board of directors of MYMD with respect to the MYMD Merger Proposal, you should be aware that certain of MYMD’s directors and executive officers have interests that are different from, or in addition to, the interests of MYMD stockholders generally, as further described in the accompanying joint proxy and consent solicitation statement/prospectus.

 

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A MYMD stockholder will have the right to seek appraisal of the fair value of such MYMD stockholder’s shares of MYMD common stock if the merger is completed, in lieu of receiving the per share merger consideration, but only if such MYMD stockholder does not sign and return a written consent to the MYMD Merger Proposal and otherwise complies with the procedures of Sections 607.1301 through 607.1340 of the Florida Business Corporation Act (the “FBCA”), which is the appraisal rights statute applicable to Florida corporations. These appraisal rights are summarized in the accompanying joint proxy and consent solicitation statement/prospectus. The accompanying joint proxy and consent solicitation statement/prospectus constitutes notice to you, in your capacity as a MYMD stockholder, from MYMD of the availability of appraisal rights under the FBCA.

 

Your written consent is very important. The Merger Agreement must be adopted by the written consent of MYMD stockholders representing seventy-five percent (75%) of the outstanding shares of common stock of MYMD in order for the merger to be consummated. PLEASE NOTE: Your consents, as evidenced by your signing and returning the signature page to the enclosed written consent, are irrevocable once they are received by MYMD, as explained in the joint proxy and consent solicitation statement/prospectus. If you have any questions concerning the merger, the Merger Agreement, the MYMD Merger Proposal, the written consent or the accompanying joint proxy and consent solicitation statement/prospectus, would like additional copies of the accompanying joint proxy and consent solicitation statement/prospectus or need help executing the written consent, please call James A. McNulty, CPA at (813) 864-2566.

 

MYMD’S BOARD OF DIRECTORS HAS CAREFULLY CONSIDERED THE MERGER AND THE TERMS OF THE MERGER AGREEMENT, AND HAS DETERMINED THAT THE MERGER IS ADVISABLE AND FAIR TO AND IN THE BEST INTERESTS OF MYMD AND ITS STOCKHOLDERS. ACCORDINGLY, MYMD’S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT MYMD STOCKHOLDERS APPROVE THE MERGER AND ADOPT AND APPROVE THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE MERGER, BY EXECUTING AND DELIVERING THE WRITTEN CONSENT FURNISHED WITH THIS JOINT PROXY AND CONSENT SOLICITATION STATEMENT/PROSPECTUS.

 

  By Order of the Board of Directors,
   
  /s/ James A. McNulty
  James A. McNulty, CPA
  Chief Executive Officer
March 23, 2021  

 

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REFERENCE TO ADDITIONAL INFORMATION

 

This joint proxy and consent solicitation statement/prospectus includes important business and financial information about Akers. Additional information about Akers is available to you without charge upon your request. You can obtain any of the documents filed with or furnished to the Securities and Exchange Commission, or the “SEC,” by Akers at no cost from the SEC’s website at http://www.sec.gov. You may also request copies of these documents at no cost by requesting them in writing or by telephone at the following address and telephone number:

 

Akers Biosciences, Inc.:

1185 Avenue of the Americas

3rd Floor

New York, New York 10036 

Attention: Corporate Secretary

Telephone: (856) 848-8698

E-mail: investors@akersbio.com

 

Or

 

Akers’ Proxy Solicitor:

Advantage Proxy, Inc.

PO Box 13581 Des Moines, WA 98198

Telephone (toll-free in North America): (877) 870-8565

Telephone (outside of North America): (206) 870-8565

Email: ksmith@advantageproxy.com

 

To obtain timely delivery of these documents, you must request them no later than five (5) business days before the date of the special meeting or deadline for submitting written consents. This means that Akers stockholders requesting documents must do so by April 10, 2021 and MYMD stockholders requesting documents must do so by April 10, 2021.

 

You should rely only on the information contained in this document. No one has been authorized to provide you with information that is different from that contained in this document. This document is dated March 23, 2021, and you should assume that the information in this document is accurate only as of such date. Neither the mailing nor delivery of this document to Akers stockholders or MYMD stockholders nor the issuance by Akers of shares of Akers common stock in connection with the merger will create any implication to the contrary.

 

ABOUT THIS JOINT PROXY AND CONSENT SOLICITATION STATEMENT/PROSPECTUS

 

Except where the context otherwise indicates, information contained in this document regarding Akers has been provided by Akers and information contained in this document regarding MYMD has been provided by MYMD. See “Where You Can Find More Information” beginning on page 288 of this joint proxy and consent solicitation statement/prospectus for more details.

 

This document does not constitute an offer to sell, or a solicitation of an offer to buy any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction.

 

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TABLE OF CONTENTS

 

ABOUT THIS JOINT PROXY AND CONSENT SOLICITATION STATEMENT/PROSPECTUS 8
   
QUESTIONS AND ANSWERS 13
   
SUMMARY 25
   
SELECTED HISTORICAL FINANCIAL INFORMATION OF AKERS 45
 
SELECTED HISTORICAL FINANCIAL INFORMATION OF MYMD 48
   
SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA 53
   
COMPARATIVE HISTORICAL AND UNAUDITED PRO FORMA PER SHARE DATA 54
   
RISK FACTORS 55
   
Risks Related to the Proposed Merger 55
Risks Related to the Reverse Stock Split 61
Risks Related to the Combined Company Following the Merger 62
Risks Related to MYMD’s Financial Position 69
Risks Related to MYMD’s Product Development and Regulatory Approval 70
Risks Related to Commercialization and Manufacturing 75
Risks Related to Government Regulation 79
Risks Related to MYMD’s Intellectual Property 82
Risks Related to Employee Matters, Managing Growth and Other Risks Related to MYMD’s Business 88

Risks Related To The Contribution Transaction

90
Risks Related to the Business of Akers Prior to the Consummation of the Merger and the Contribution Transaction 90
Risks Related to Akers’ Financial Position and Need for Additional Capital 105
   
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS 109
   
MARKET AND INDUSTRY DATA 111
   
THE COMPANIES 112
   
Akers Biosciences, Inc. 112
XYZ Merger Sub Inc. 112
MyMD Pharmaceuticals, Inc. 112
   
THE SPECIAL MEETING OF AKERS STOCKHOLDERS 113
 
General 113
Date, Time and Place 113
Purpose of the Akers Special Meeting 113
Recommendation of the Akers Board of Directors 113
Akers Record Date and Quorum 114
Vote Required for Approval 114
Abstentions and Broker Non-Votes 114
Manner of Submitting Proxy 115
Shares Held in Street Name 115
Revocation of Proxies and Voting Instructions 116

Tabulation of Votes

116
Solicitation of Proxies 116
Assistance 116
   
AKERS PROPOSAL 1 — APPROVAL OF THE SHARE ISSUANCE PROPOSAL 117
   
AKERS PROPOSAL 2 — APPROVAL OF THE REVERSE STOCK SPLIT PROPOSAL 118
 
AKERS PROPOSAL 3 — APPROVAL OF A&R CHARTER PROPOSAL 121
   
AKERS PROPOSAL 4 — APPROVAL OF THE INCENTIVE PLAN PROPOSAL TO APPROVE THE AKERS BIOSCIENCES, INC. 2021 EQUITY INCENTIVE PLAN 122
   
AKERS PROPOSAL 5 — APPROVAL OF THE AKERS GOLDEN PARACHUTE COMPENSATION PROPOSAL 130
   
AKERS PROPOSAL 6 — APPROVAL OF THE CONTRIBUTION PROPOSAL 131
   
AKERS PROPOSAL 7 — APPROVAL OF THE ADJOURNMENT PROPOSAL 136

 

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MYMD SOLICITATION OF WRITTEN CONSENT 137
 
MYMD Stockholder Action by Written Consent 137
Record Date 137
MYMD Stockholders Entitled to Consent 137
Consent Required 137
Submission of Consents 138
Executing Consents; Revocation of Consents 138
Appraisal Rights 138
Solicitation of Consents; Expenses 138
Recommendation of MYMD’s Board of Directors 139
Assistance 139
   
THE MERGER 140
   
General 140
Background of the Merger 141
Akers’ Reasons for the Merger 143
MYMD’s Reasons for the Merger 145
Opinion of Akers’ Financial Advisor 148
Listing of Akers’ Common Stock 155
Restrictions on Sales of Shares of Akers Common Stock Received in the Merger 155
Opinions as to Material U.S. Federal Income Tax Consequences of the Merger 155
Ownership of Akers Following the Merger 155
Board Composition and Management of Akers after the Merger 156
Interests of Akers’ Directors and Executive Officers in the Merger 156
Interests of MYMD’s Directors and Executive Officers in the Merger 158
Regulatory Approvals Required for the Merger 161
Accounting Treatment 162
U.S. Federal Income Tax Considerations 162
Appraisal Rights 162
Treatment of MYMD Stock Options 165
The MyMD Stock Incentive Plan 166
Supera Asset Purchase Agreement 166
Bridge Loan Note 166
The Lock-up/Leak-out Agreements 166
Stockholder Voting Agreements 166
Lock-up and Support Agreement 166
   
THE MERGER AGREEMENT 167
   
Form, Effective Time and Closing of Merger 167
Effects of Merger; Merger Consideration 167
Treatment of MYMD Stock Options 168
Exchange Ratio 168
Additional Consideration 169
Milestone Payments 169
Payoff of the Starwood Trust 170
Exchange Procedures 170
Directors and Executive Officers of the Combined Company Following the Merger 171
Conditions to the Closing of the Merger 171
Representations and Warranties 174
No Solicitation 175
Meetings/Written Consent of Stockholders 176
Covenants; Conduct of Business Pending the Merger 177
Other Agreements 180

 

10
 

 

Termination of the Merger Agreement 181
Termination Conversion Right 182
Amendment 182
   
ANCILLARY AGREEMENTS 183
   
Supera Asset Purchase Agreement 183
Bridge Loan Note 183
The Lock-up/Leak-out Agreements 183
Lock-up and Support Agreement 183
   
CONTRIBUTION AND ASSIGNMENT AGREEMENT 184
   
Explanatory Note Regarding the Contribution and Assignment Agreement 184
The Contribution Transaction 184
Completion of the Contribution Transaction 185
Purchase Price 185
Royalty Payments 185
Representations and Warranties 186
Additional Covenants 187
Governing Law 187
Recommendation 187
Termination and Release Agreement 187
   
COMPARATIVE MARKET PRICE AND DIVIDEND INFORMATION 188
   
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS 189
   
MANAGEMENT OF THE COMBINED COMPANY 199
   
Executive Officers and Directors of the Combined Company Following the Merger 199
Family Relationships 202
Voting Agreement 202
Board Composition 202
Independence of the Board of Directors 202
MYMD’s Executive Officer and Director Compensation 203
Summary Compensation Table 203
Narrative Disclosure to Summary Compensation Table (MYMD) 203
Equity Compensation (MYMD) 205
Other Elements of Compensation (MYMD) 206
Potential Payments Upon Termination of Employment or Change in Control 206
Outstanding Equity Awards at Fiscal Year-End (MYMD) 206
Incentive Plans 207
Director Compensation (MYMD) 209
Executive Officer Compensation (Akers). 209
Summary Compensation Table 209
Narrative Disclosure to Summary Compensation Table 209
Outstanding Equity Awards at Fiscal Year-End 210
Director Compensation (Akers) 210
   
PRINCIPAL STOCKHOLDERS OF AKERS AND THE COMBINED COMPANY 211
   
PRINCIPAL STOCKHOLDERS OF MYMD AND THE COMBINED COMPANY 213
   
RELATED PARTY TRANSACTIONS 214
   
Akers Related Party Transactions 214
MYMD Related Party Transactions 214
   
CERTAIN MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER 215
   
INFORMATION ABOUT AKERS 218
   
Business Overview 218
Coronavirus and COVID-19 Pandemic 218
Impact of the COVID-19 Pandemic on Our Business 218
Coronavirus Vaccine Development 219
Competition 220
Acquisition and License Agreements 221
Intellectual Property 222
Government Regulation and Product Approval 223
Available Information 229
Employees 229
Akers Management’s Discussion and Analysis of Financial Condition and Results of Operations 230

 

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Overview 230
Coronavirus and COVID-19 Pandemic 230
Recent Developments 231
Results of Operations 233
Summary of Statements of Operations for the Fiscal Years Ended December 31, 2020 and 2019 233
Liquidity and Capital Resources 235
Critical Accounting Policies 236
Off-Balance Sheet Arrangements 236
   
INFORMATION ABOUT MYMD 237
   
Overview 237
MyMD Background and Corporate History 237
Drug Development 238
Strategy 238
MYMD-1 239
Supera-1R 246
Sales and Marketing 248
Competition 248
Intellectual Property 249
Assignment and Royalty Agreements 249

Government Regulations

250
Employees 259
MYMD Management’s Discussion and Analysis of Financial Condition and Results of Operations 259
Supera’s Management’s Discussion and Analysis of Financial Condition and Results of Operations 266
   
DESCRIPTION OF AKERS CAPITAL STOCK 271
 
COMPARISON OF RIGHTS OF AKERS STOCKHOLDERS AND MYMD STOCKHOLDERS 280
   
LEGAL MATTERS 288
   
EXPERTS 288
   
WHERE YOU CAN FIND MORE INFORMATION 288
   
FUTURE STOCKHOLDER PROPOSALS 289
   
Akers 289
Inclusion of Proposals in Akers’ Proxy Statement and Proxy Card under the SEC’s Rules 289
Bylaws Requirements for Stockholder Submissions of Nominations and Proposals 289
MYMD 289
Inclusion of Proposals in MYMD’s Proxy Statement and Proxy Card under the SEC’s Rules 289
Bylaws Requirements for Stockholder Submissions of Nominations and Proposals 289
   
AKERS FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM F-1
   
MYMD FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM F-57
   
SUPERA FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM F-70
   
ANNEXES  
   
A. Merger Agreement and Amendment A-1
A-1. Amendment No. 1 to Merger Agreement

A-85

B. Amended and Restated Certificate of Incorporation of MYMD Pharmaceuticals, Inc. B-1
C. Akers Reverse Stock Split Charter Amendment C-1
D. Akers Biosciences, Inc. 2021 Equity Incentive Plan D-1
E. Florida Corporate Statute on Appraisal Rights E-1
F. Opinion of Akers’ Financial Advisor F-1
G. Lock-Up/Leak-Out Agreement G-1
H. Bridge Note H-1
I. Akers Voting Agreement I-1
J. MYMD Voting Agreement J-1
K. Supera Asset Purchase Agreement K-1
L. Contribution Agreement

L-1

M. Affirmation Letter M-1

 

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QUESTIONS AND ANSWERS

 

The following are answers to some questions that Akers stockholders and MYMD stockholders may have regarding the proposed merger and the other proposals being considered by Akers stockholders and MYMD stockholders. Akers and MYMD urge you to read carefully this entire joint proxy and consent solicitation statement/prospectus, including the annexes, because the information in this section does not provide all the information that might be important to you.

 

Unless the context otherwise requires, references in this joint proxy and consent solicitation statement/prospectus to “Akers” refers to Akers Biosciences, Inc., a New Jersey corporation; “Merger Sub” refers to XYZ Merger Sub Inc., a Florida corporation and a wholly owned subsidiary of Akers, and “MYMD” refers to MyMD Pharmaceuticals, Inc., a privately-held Florida corporation.

 

Questions and Answers About the Merger and the Contribution Transaction

 

Q: Why am I receiving this joint proxy and consent solicitation statement/prospectus?
   
A: You are receiving this joint proxy and consent solicitation statement/prospectus because you are a stockholder of record of either Akers, as of March 15, 2021, the record date for the Akers special meeting, or MYMD, as of March 18, 2021, the record date for the MYMD solicitation of written consent.

 

Akers, Merger Sub and MYMD have entered into an Agreement and Plan of Merger and Reorganization, dated as of November 11, 2020, as amended (as may be amended from time to time, the “Merger Agreement”). Pursuant to the Merger Agreement, Merger Sub will be merged with and into MYMD, with MYMD continuing as the surviving company and a wholly owned subsidiary of Akers. See “THE MERGER” beginning on page 140 and “THE MERGER AGREEMENT” beginning on page 167 of this joint proxy and consent solicitation statement/prospectus. A copy of the Merger Agreement is attached to this joint proxy and consent solicitation statement/prospectus as Annex A. If the merger is completed, (i) holders of outstanding shares of MYMD common stock (referred to herein as the MYMD stockholders) will be entitled to receive (x) the number of shares of Akers common stock per share of MYMD common stock they hold at the exchange ratio, as calculated in accordance with the Merger Agreement (the “Exchange Ratio”), prior to giving effect to the proposed reverse stock split discussed below, or an aggregate of approximately 58,821,708 shares of Akers common stock at closing using the assumed Exchange Ratio of 0.7950 (which is subject to change depending on the net amount of cash Akers has and the number of outstanding securities of Akers and MYMD at the effective time of the merger), (y) an amount in cash, on a pro rata basis, equal to the aggregate cash proceeds received by Akers from the exercise of any options to purchase shares of MYMD common stock assumed by Akers upon closing of the merger prior to the second-year anniversary of the closing of the merger (the “Option Exercise Period”), such payment (the “Additional Consideration”) to occur not later than 30 days after the last day of the Option Exercise Period, up to the maximum amount of cash consideration that may be received by MYMD stockholders without affecting the intended tax consequences of the merger, and (z) potential milestone payments in shares of Akers common stock (“Milestone Payments”) up to the number of merger consideration shares issued by Akers to MYMD stockholders at the closing of the merger (“Milestone Shares”) payable upon achievement of certain market capitalization milestone events during the 36-month period immediately following the closing of the merger (the “Milestone Period”); and (ii) each outstanding option to purchase MYMD common stock granted under the Second Amendment to Amended & Restated 2016 Stock Incentive Plan with an effective date of July 1, 2019, as established and maintained by MYMD (and, as amended and restated from time to time, the “MyMD Incentive Plan”) that has not previously been exercised prior to the closing of the merger, whether or not vested, will be assumed by Akers subject to certain terms contained in the Merger Agreement, and become an option to purchase a number of shares of the Akers common stock equal to the number of shares of MYMD common stock underlying such option multiplied by the Exchange Ratio, which shall expire on the second-year anniversary of the closing of the merger, and the exercise price for each share of Akers common stock underlying an assumed option to purchase MYMD common stock will be equal to the exercise price per share of the option to purchase MYMD common stock in effect immediately prior to the completion of the merger divided by the Exchange Ratio. Upon completion of the merger, the combined company is expected to be renamed MyMD Pharmaceuticals, Inc.

 

The Merger Agreement requires, among other things, unless otherwise waived by Akers and MYMD, for the merger to be consummated:

 

  Approval of each of the proposals presented to Akers stockholders to be voted on at the Akers special meeting other than the Akers Golden Parachute Compensation Proposal, including the approval of the Share Issuance Proposal, the Incentive Plan Proposal, the Reverse Stock Split Proposal, the Contribution Proposal and the A&R Charter Proposal, each of which requires the affirmative vote of the majority of the votes cast on such matter; and
  Adoption and approval of the MYMD Merger Proposal, which requires the written consent of holders of at least 75% of the issued and outstanding common stock of MYMD.

 

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As a condition to closing the merger, the Merger Agreement also requires that MYMD consummate the purchase of substantially all of the assets and certain liabilities of Supera Pharmaceuticals, Inc., a Florida corporation (the “Supera Purchase”), which MYMD has agreed to effect pursuant to an Asset Purchase Agreement, pursuant to which MYMD agreed to acquire from Supera, immediately prior to the completion of the merger, substantially all of its assets (such agreement, the “Supera Asset Purchase Agreement”).

 

As previously reported, on March 23, 2020, Akers entered a membership interest purchase agreement (as amended by Amendment No. 1 on May 14, 2020, the “MIPA”) to acquire 100% of the membership interests of Cystron Biotech, LLC (“Cystron”) from certain selling parties (the “Cystron Sellers”). Cystron is a party to a license agreement with Premas Biotech PVT Ltd. (“Premas”) whereby Premas granted Cystron, amongst other things, an exclusive license with respect to Premas’ vaccine platform for the development of a vaccine against SARS-CoV-2, a coronavirus currently causing a pandemic throughout the world (“COVID-19”).

 

On March 18, 2021, Akers and Cystron entered into a Contribution and Assignment Agreement (the “Contribution and Assignment Agreement”), by and among Akers, Cystron, Oravax Medical, Inc. (“Oravax”), and Premas. Pursuant to the Contribution and Assignment Agreement (the “Contribution Agreement”), Akers agreed to contribute (i) an amount in cash equal to $1,500,000 to Oravax and (ii) to cause Cystron to contribute substantially all of the assets associated with its business of developing and manufacturing of Cystron’s COVID-19 vaccine candidate to Oravax (the “Contribution Transaction”). The Contribution Transaction shall not be effective until the earlier to occur of (i) the date that is 90 days after March 18, 2021 and (ii) the closing of the merger. In consideration for Akers’ commitment to consummate the Contribution Transaction, Oravax issued to Akers 390,000 shares of its capital stock Oravax (the “Oravax Shares”) and assumed all of the obligations or liabilities in respect of the assets of Cystron, including the obligations under the License Agreement. In addition, Oravax agreed to pay future royalties to Akers equal to 2.5% of all net sales of products (or combination products) manufactured, tested, distributed and/or marketed by Oravax or its subsidiaries.

 

Simultaneously with the entry into the Contribution and Assignment Agreement, Oravax entered into a license agreement with Oramed Pharmaceuticals, Inc. (“Oramed”). Pursuant to the license agreement, Oramed has agreed to license certain technology for the oral delivery of pharmaceuticals to Oravax and to contribute $1,500,000 in cash to Oravax effective upon the consummation of the Contribution Transaction. In consideration of Oramed’s commitments, Oravax issued 1,890,000 shares of its capital stock to Oramed.

 

As a result of the issuance of Oravax shares to Oramed, Akers’ share ownership of Oravax consists of 13% of Oravax’s outstanding shares of capital stock. Akers, Oramed and the other shareholders of Oravax executed a shareholder’s agreement containing customary terms.

 

The Contribution and Assignment Agreement contains representations, warranties and covenants by Akers, Cystron and Oravax that are typical for this type of transaction. Consummation of the transactions contemplated by the Contribution and Assignment Agreement is subject to certain conditions, including the receipt by Akers of the affirmative vote of a majority of the votes cast by those stockholders entitled to vote and present in person or by proxy.

 

This joint proxy and consent solicitation statement/prospectus contains important information about the merger and the proposals being voted on by Akers stockholders and MYMD stockholders, and you should read it carefully. This document collectively serves as a proxy statement of Akers, consent solicitation statement of MYMD and a prospectus of Akers. It is a joint proxy and consent solicitation statement because both the Akers and MYMD boards of directors are soliciting proxies or written consents from their respective stockholders. It is a prospectus because Akers will issue shares of Akers common stock to MYMD stockholders in connection with the merger. Your vote is important. You are encouraged to submit your proxy or written consent as soon as possible after carefully reviewing this joint proxy and consent solicitation statement/prospectus and its annexes.

 

Q: What will happen in the merger?
   
A: At the closing of the merger, Merger Sub will merge with and into MYMD, with MYMD surviving the merger as a wholly owned subsidiary of Akers, and Akers will issue approximately 58,821,708 shares of its common stock to MYMD stockholders in exchange for MYMD common stock using the assumed Exchange Ratio of 0.7950 (which is subject to change depending on the net amount of cash Akers has and the number of outstanding securities of Akers and MYMD at the effective time of the merger), prior to giving effect to the proposed reverse stock split contemplated by the Reverse Stock Split Proposal, as applicable, and the options to purchase MYMD common stock will be assumed upon closing of the and become options to purchase 8,628,420 shares of combined company common stock. In addition, Milestone Shares may be issued upon achievement of certain market capitalization milestone events during the Milestone Period. Upon completion of the merger, the combined company is expected to be renamed MyMD Pharmaceuticals, Inc.
   
Q: What will happen in the Contribution Transaction?
   
A: 

At the closing of the Contribution Transaction, which is expected to occur on the date of the closing of the merger, Cystron will contribute substantially all of its assets, including the License Agreement, to Oravax. In addition, Akers will contribute cash equal to $1,500,000 to Oravax on or before the closing date of the merger. In consideration of Akers’ commitment to consummate the Contribution Transaction, Akers received the Oravax Shares, and effective on the closing, Oravax will assume certain liabilities of Cystron and Akers will be entitled to certain royalty rights as set forth in the Contribution and Assignment Agreement. Upon closing of the Contribution Transaction, Akers will pay $1.2 million to Premas, (with certain additional amounts to be paid at a future date) in satisfaction of all current accrued and unpaid milestone payments due pursuant to the License Agreement, and the MIPA will be terminated. Following the consummation of the merger and the Contribution Transaction, it is anticipated that the combined company will focus its resources on executing MYMD’s current business plan, including the Supera line of business.

   
Q: What equity stake will current Akers stockholders and former MYMD stockholders hold in Akers after the closing of the merger?
   
A:

It is anticipated that, immediately after the closing of the merger, prior to giving effect to the proposed reverse stock split contemplated by the Reverse Stock Split Proposal, (i) MYMD stockholders and optionholders will own approximately 80% of the fully diluted equity of the combined company, excluding certain warrants and subject to adjustment to the extent that Akers’ net cash at the Effective Time exceeds the minimum amount of net cash of $25 million (less certain advances, loans and payoff amounts) that Akers is required to have at closing pursuant to a formula set forth in the Merger Agreement and as further described under “THE MERGER — General” in this joint proxy and consent solicitation statement/prospectus (which after giving effect to such exclusion and adjustment is currently expected to be approximately 68.8% of the fully diluted equity of the combined company) and (ii) current Akers stockholders and holders of certain outstanding options and warrants to purchase shares of Akers common stock (excluding shares issuable upon exercise of options and warrants having an exercise price in excess of $1.72, prior to giving effect to any stock splits, combinations, reorganizations and the like with respect to the Akers common stock between the announcement of the merger and the closing of the merger) and holders of outstanding restricted stock units will own approximately the balance of the fully diluted equity of the combined company. If the Reverse Stock Split Proposal is approved and the combined company effects the reverse stock split, the percentage ownership interest of the combined company’s stockholders will not change, except to the extent that the reverse stock split would result in the rounding up of a fractional share issued to a combined company stockholder.

   
 

The Exchange Ratio, as calculated in accordance with the Merger Agreement, is currently assumed to be 0.7950 (which is subject to change depending on the net amount of cash Akers has and the number of outstanding securities of Akers and MYMD at the effective time of the merger). If the amount of Akers’ net cash at the Effective Time exceeds the minimum amount of net cash of $25 million (less certain advances, loans and payoff amounts) that Akers is required to have at closing pursuant to a formula set forth in the Merger Agreement increases by $500,000, the Exchange Ratio will decrease to 0.7866. If the amount of Akers’ net cash at the Effective Time exceeds the minimum amount of net cash of $25 million (less certain advances, loans and payoff amounts) that Akers is required to have at closing pursuant to a formula set forth in the Merger Agreement decreases by $500,000, the Exchange Ratio will increase to 0.8036.

   
Q: When is the merger expected to be completed?
   
A: Akers and MYMD anticipate that the merger will be consummated promptly following the Akers special meeting, provided that all other conditions to the consummation of the merger in the Merger Agreement have been satisfied or waived. However, it is possible that the failure to timely meet the closing conditions specified in the Merger Agreement or other factors outside of Akers’ or MYMD’s control could require Akers and MYMD to complete the merger at a later time or not at all. See “THE MERGER AGREEMENT — Conditions to the Closing of the Merger” on page 171 of this joint proxy and consent solicitation statement/prospectus for a more complete summary of the conditions that must be satisfied prior to closing.

 

14
 

 

Q: What happens if the merger is not consummated or is terminated?
   
A:

There are certain circumstances under which the Merger Agreement may be terminated. If the Merger Agreement is terminated pursuant to its terms, the merger will not be consummated. If the merger is not completed for any reason, MYMD stockholders will not receive any merger consideration or shares of Akers common stock for their equity in MYMD pursuant to the Merger Agreement or otherwise. Instead, Akers and MYMD will remain separate companies, and Akers expects that its common stock will continue to be registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and traded on The Nasdaq Capital Market.

 

Even if the merger does not close, Akers is obligated to close the Contribution Transaction on the 90th day from the date of the Contribution and Assignment Agreement. See “ANCILLARY DOCUMENTS — Contribution and Assignment Agreement — Completion of the Contribution Transaction” beginning on page 184 of this joint proxy and consent solicitation statement/prospectus.

   
  If the merger does not close and the Contribution Transaction is not consummated, the board of directors of Akers (the “Akers Board of Directors”) may elect to, among other things, attempt to complete another strategic transaction like the merger, attempt to sell or otherwise dispose of the various assets of Akers or continue to operate the business of Akers. In the event that the Akers Board of Directors decides to dissolve and liquidate Akers’ assets, Akers would be required to pay all of its debts and contractual obligations, and to set aside certain reserves for potential future claims. This would be a lengthy and uncertain process, and there can be no assurances as to the amount or timing of available cash, if any, that would be left to distribute to Akers stockholders after paying the debts and other obligations of Akers and setting aside funds for reserves. See “THE MERGER AGREEMENT — Termination of the Merger Agreement,” beginning on page 181 of this joint proxy and consent solicitation statement/prospectus for information regarding the parties’ specific termination rights.
   
Q: Are there any fees or costs associated with terminating the Merger Agreement?
   
A:

If the Merger Agreement is terminated other than in a termination by Akers due to (i) MYMD’s failure to obtain stockholder approval within the timeframe required by the Merger Agreement or (ii) MYMD’s breach of its representations, warranties, or covenants under the Merger Agreement, then, at MYMD’s sole discretion, all or any part of the loan amounts under the secured promissory note pursuant to which Akers may loan to MYMD an aggregate of up to $3.0 million (the “Bridge Loan Note”) and, any additional secured promissory notes that may be issued upon extension of the term of the Merger Agreement beyond April 15, 2021, as provided for in the Merger Agreement, if applicable, will be convertible into shares of MYMD common stock at a conversion price per share of $2.00. See “THE MERGER AGREEMENT — Termination of the Merger Agreement,” and “THE MERGER AGREEMENT — Termination Conversion Right” beginning on page 182 of this joint proxy and consent solicitation statement/prospectus for information regarding the parties’ specific termination rights.
   
Q: What do I need to do now?
   
A: After you have carefully read this joint proxy and consent solicitation statement/prospectus and have decided how you wish to vote your shares, in the case of Akers stockholders, please authorize a proxy to vote your shares promptly so that your shares are represented and voted at the Akers special meeting or, in the case of MYMD stockholders, please execute and return your written consent as soon as possible.
   
  Questions and Answers for Akers Stockholders
   
Q: What will I receive in the merger?
   
A: If the merger is completed, Akers stockholders will not receive any merger consideration and will continue to hold the shares currently held by such stockholders.
   
  Common shares of Akers are currently traded on The Nasdaq Capital Market under the symbol “AKER”. In connection with and immediately prior to the merger, MYMD will change its name to “MyMD Pharmaceuticals (Florida), Inc.” and Akers will change its name to “MyMD Pharmaceuticals, Inc.” Akers will apply to change its trading symbol on The Nasdaq Capital Market to “MYMD.” Akers stockholders will experience dilution as a result of the issuance of Akers common stock to the MYMD stockholders in connection with the merger, including assumption of the MYMD options. In addition, all combined company stockholders will experience further dilution upon issuance of the Milestone Shares (as defined below) upon achievement of certain market capitalization milestone events.

 

15
 

 

Q: When and where is the Akers special meeting?
   
A: The Akers special meeting will be held on April 15, 2021 at 10:00 a.m., Eastern Time and will be “virtual,” meaning that you can participate in the meeting online at www.virtualshareholdermeeting.com/AKER2021SM at the appointed time and date. Akers stockholders are encouraged to access the special meeting before the start time of 10:00 a.m., Eastern Time on April 15, 2021. Please allow ample time for online check-in. Akers stockholders will not be able to attend the special meeting in person.
   
Q: Why are you holding a virtual special meeting?
   
A: Due to the ongoing COVID-19 pandemic and to support the health and well-being of Akers stockholders and in consideration of various public health safety measures, this special meeting will be held in a virtual meeting format only. Akers has designed its virtual format to enhance, rather than constrain, stockholder access, participation and communication. For example, the virtual format allows Akers stockholders to communicate with Akers in advance of, and during, the special meeting so they can ask questions of the Akers Board of Directors or management, as time permits.
   
Q: What happens if there are technical difficulties during the special meeting?
   
A:

If you encounter any technical difficulties logging into the website (www.virtualshareholdermeeting.com/AKER2021SM) or during the virtual meeting, there will be a 1-800 number and international number available on the website to assist you. Technical support will be available 15 minutes prior to the start time of the virtual meeting.

   
Q: What is being voted on?
   
A: At the Akers special meeting, Akers stockholders will be asked to consider and vote upon the matters outlined in the accompanying Notice of Special Meeting of Stockholders of Akers, including the following:
   
  (1) The Share Issuance Proposal — to approve, for purposes of complying with Nasdaq Listing Rule 5635(a), the issuance of shares of Akers common stock (including potential Milestone Payments of Milestone Shares payable upon achievement of certain market capitalization milestone events during the Milestone Period) to MYMD stockholders and other parties in connection with the merger of Merger Sub with and into MYMD, pursuant to the terms and conditions of the Merger Agreement and the transactions contemplated thereby or in connection therewith;
   
  (2) The Reverse Stock Split Proposal — to approve an amendment to the A&R Charter to effect a reverse stock split at the discretion of the Akers Board of Directors with a ratio between 1-for-1.5 and 1-for-20 with respect to the issued and outstanding common stock of the combined company immediately following the merger. The reverse stock split will increase Akers’ stock price to at least $5.00 per share, and the final reverse stock split ratio will be subject to the mutual agreement of Akers and MYMD;
   
  (3) The A&R Charter Proposal — to approve the amendment and restatement of Akers’ certificate of incorporation in its entirety which will be in effect at the effective time of the merger;
   
  (4) The Incentive Plan Proposal — to approve the Akers Biosciences, Inc. 2021 Equity Incentive Plan;
   
  (5) The Akers Golden Parachute Compensation Proposal — to approve, on a non-binding advisory basis, the compensation that may be paid or become payable to Akers’ named executive officers in connection with the merger;
   
  (6) The Contribution Proposal — to approve the contribution to Oravax of (a) an amount in cash equal to $1,500,000, and, (b) cause Cystron to assign to Oravax substantially all of its assets, including the License Agreement, in exchange for a number of shares of Oravax’s capital stock equivalent to 13% of Oravax’s then outstanding capital stock on a fully diluted basis pursuant to the Contribution and Assignment Agreement; and
   
  (7) The Adjournment Proposal — to consider and vote upon a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit the solicitation of additional proxies if, based upon the tabulated vote at the time of the special meeting, there are not sufficient votes to approve one or more proposals presented to stockholders for vote.

 

16
 

 

Q: Are the proposals conditioned on one another?
   
A: Each of the Reverse Stock Split Proposal, A&R Charter Proposal and Incentive Plan Proposal are conditioned on the approval of the Share Issuance Proposal, and the approval of the Share Issuance Proposal is conditioned on the approval of the Reverse Stock Split Proposal and the A&R Charter Proposal. The Adjournment Proposal, the Contribution Proposal, and the Akers Golden Parachute Compensation Proposal do not require approval of any other proposal to be effective. It is important for you to note that in the event that the Share Issuance Proposal does not receive the requisite vote for approval, then Akers and MYMD will not consummate the merger.
   
Q: What will happen if the Reverse Stock Split Proposal is approved?
   
A: If the Reverse Stock Split Proposal is approved, at the discretion of the Akers Board of Directors, Akers will effect a reverse stock split with a ratio between 1-for-1.5 and 1-for-20 with respect to the issued and outstanding common stock of the combined company immediately following the merger, thereby reducing the total number of outstanding shares of the combined company’s common stock from approximately 76,279,500 shares to between approximately 3,813,977 shares and 50,853,000 shares, excluding shares underlying outstanding shares of preferred stock, options and warrants or from approximately 21,655,336 to between approximately 1,082,768 shares and 14,436,892 shares, assuming the assumed exchange ratio of 0.7950 and the exercise in full of certain pre-funded warrants issued in the private placement between Akers and certain institutional and accredited investors that closed on November 17, 2020 (the “Akers Private Placement”), options and other warrants and conversion of the outstanding shares of preferred stock. The final reverse stock split ratio will be subject to the mutual agreements of Akers and MYMD. To the extent that the reverse stock split would result in any stockholders of the combined company otherwise owning a fractional share of the combined company’s common stock, such share will be rounded up to the nearest whole share. The reverse stock split will affect all stockholders of the combined company uniformly and will not change any stockholder’s percentage ownership interest in the combined company, except to the extent that the reverse stock split would result in the rounding up of fractional shares. Unless otherwise set forth herein or unless the context indicates otherwise, all share amounts in this joint proxy and consent solicitation statement/prospectus do not give effect to the reverse stock split. You are encouraged to review the proposed amendment to the amended and restated certificate of incorporation of the combined company, which will be in effect at the effective time of the merger (the “A&R Charter”), subject to approval of the A&R Charter Proposal, effecting the reverse stock split, a copy of which is included in this joint proxy and consent solicitation statement/prospectus as Annex C. The reverse stock split will cause the price of the issued and outstanding common stock of the combined company at the effective time to equal at least $5.00.
   
Q: What constitutes a quorum for the Akers special meeting?
   
A: Pursuant to the amended and restated certificate of incorporation of Akers, as amended from time to time currently in effect (the “Akers Charter”), holders entitled to cast forty percent (40%) of the votes at a duly called special meeting present in person or represented by proxy is necessary to constitute a quorum to transact business. Stockholders of common stock present at the special meeting or represented by proxy (including stockholders who abstain or do not vote with respect to one or more of the matters presented for stockholder approval) will be counted for purposes of determining whether a quorum is present. “Broker non-votes,” which are shares that are held in “street name” by a bank or brokerage firm that indicates on its proxy that it does not have discretionary authority to vote on a particular matter, will not be counted for purposes of determining whether a quorum is present.
   
  Pursuant to the Akers Bylaws, if a quorum is not present, the special meeting may be adjourned, without notice other than announcement at the meeting, to another place, date, or time by the stockholders entitled to vote thereat present in person or represented by proxy. As of the record date for the special meeting, 6,690,329 shares of our common stock would be required to achieve a quorum.
   
Q: What is the record date and what does it mean?
   
A: The record date to determine the stockholders entitled to notice of and to vote at the special meeting is the close of business on March 15, 2021. The record date was established by the Akers Board of Directors as required by New Jersey law. On the record date, 16,652,829 shares of Akers common stock were issued and outstanding and 72,992 shares of Akers’ Series D Convertible preferred stock (the “Series D Convertible Preferred Stock”) were issued and outstanding.
   
Q: Who is entitled to vote at the special meeting?
   
A:

Holders of Akers common stock at the close of business on the Akers record date may vote at the special meeting. In addition, holders of outstanding shares of Series D Convertible Preferred Stock may vote at the special meeting, if such shares of Series D Convertible Preferred Stock are not converted before the special meeting.

 

17
 

 

Q: How many votes do I have?
   
A: If you are a holder of Akers common stock, you are entitled to one vote on each proposal to be considered at the Akers special meeting for each share of Akers common stock that you owned as of the close of business on March 15, 2021, which is the Akers record date. If you are a holder of Series D Convertible Preferred Stock that has not been converted before the special meeting, you are entitled to one vote on each proposal to be considered at the Akers special meeting for each share of Series D Convertible Preferred Stock that you owned as of the close of business on March 15, 2021, which is the Akers record date.
   
Q: Why is my vote important?
   
A: It is important for you to note that in the event that the Share Issuance Proposal does not receive the requisite vote for approval, then Akers and MYMD will not consummate the merger. Moreover, each of the Reverse Stock Split Proposal, A&R Charter Proposal and Incentive Plan Proposal are conditioned on the approval of the Share Issuance Proposal, and the Share Issuance Proposal is conditioned on the approval of the Reverse Stock Split Proposal and the A&R Charter Proposal; therefore, if the Share Issuance Proposal is not approved, Akers will not be able to implement the actions proposed under the Reverse Stock Split Proposal, the A&R Charter Proposal and the Incentive Plan Proposal, and if the Reverse Stock Split Proposal or the A&R Charter Proposal is not approved, Akers will not be able to implement the actions proposed under the Share Issuance Proposal.
   
Q: What happens if the Akers Golden Parachute Compensation Proposal is not approved?
   
A: Nothing will happen if the Akers Golden Parachute Compensation Proposal is not approved, as it is advisory only. The Akers Golden Parachute Compensation Proposal gives Akers stockholders the opportunity to express their views on the compensation Akers’ named executive officers would receive in connection with the merger. If the merger is completed, the merger-related compensation may be paid to Akers’ named executive officers to the extent payable in accordance with the terms of the relevant compensation agreements and arrangements, even if Akers stockholders fail to approve the advisory vote regarding merger-related compensation.
   
Q: How do I vote?
   
A: If you are a stockholder of record, you may vote your shares of Akers capital stock on the matters to be presented at the Akers special meeting in any of the following ways:
   
  During the Special Meeting — To vote at the special meeting, you can participate in the meeting online at www.virtualshareholdermeeting.com/AKER2021SM at the appointed time and date and you will be able to vote by ballot. To ensure that your shares of Akers capital stock are voted at the Akers special meeting, the Akers Board of Directors recommends that you submit a proxy even if you plan to attend the Akers special meeting. Akers stockholders will not be able to attend the special meeting in person. Instructions on how to vote while participating in the special meeting via live webcast are posted at www.virtualshareholdermeeting.com/AKER2021SM.
   
  By Mail — To vote using the enclosed proxy card, simply complete, sign and date the enclosed proxy card and return it promptly in the enclosed return envelope. If you return your signed proxy card to Akers before the Akers special meeting, the persons named as proxies will vote your shares of Akers capital stock as you direct.
   
 

By Telephone — To vote by telephone, dial the toll free telephone number located on the enclosed proxy card using a touch-tone phone and follow the recorded instructions. You will be asked to provide the company number and the 16-digit control number from the enclosed proxy card.

   
  By Internet — To vote over the Internet, go to the web address identified on the enclosed proxy card to complete an electronic proxy card. You will be asked to provide the company number and control number from the enclosed proxy card.
   
  If your shares are held in “street name” by a broker, bank or other nominee, please refer to the voting instructions provided by your bank, brokerage firm or other nominee to see which of the above choices are available to you. Your bank, brokerage firm or other nominee cannot vote your shares without instructions from you. Please note that if your shares are held in “street name” and you wish to vote at the Akers special meeting, you must obtain a legal proxy from your bank, brokerage firm or other nominee.

 

18
 

 

Q: What is the vote required to approve each proposal?
   
A:

Assuming the presence of a quorum, approval of the Share Issuance Proposal (for purposes of complying with Nasdaq Listing Rule 5635(a)), the Incentive Plan Proposal, the Akers Golden Parachute Compensation Proposal, the Reverse Stock Split Proposal, the A&R Charter Proposal, the Contribution Proposal, and the Adjournment Proposal each requires, the affirmative vote of a majority of the votes cast by those shares entitled to vote on such matter. An Akers stockholder’s abstention from voting, or the failure of an Akers stockholder who holds his or her shares in “street name” through a broker or other nominee to give voting instructions to such broker or other nominee, will have no effect on the outcome of any vote on the Share Issuance Proposal, the Incentive Plan Proposal, the Reverse Stock Split Proposal, the Akers Golden Parachute Compensation Proposal, the Contribution Proposal or the Adjournment Proposal.

   
 

Consummation of the merger is subject to certain closing conditions, including, among other things, approval by the stockholders of Akers and MYMD, the continued listing of Akers’ common stock on The Nasdaq Capital Market after the merger and satisfaction of a minimum net cash threshold by Akers. In accordance with the terms of the Merger Agreement, (i) the officers, directors and certain affiliated stockholders of MYMD (solely in their respective capacities as MYMD stockholders) holding approximately 61% of the outstanding MYMD common stock have entered into voting agreements with Akers (the “MYMD Voting Agreements”) and (ii) the officers and directors of Akers (solely in their respective capacities as Akers stockholders) holding approximately 1% of the outstanding Akers common stock have entered into voting agreements with MYMD (the “Akers Voting Agreements” and, together with the MYMD Voting Agreements, the “Voting Agreements”). The Voting Agreements place certain restrictions on the transfer of the shares of Akers and MYMD held by the respective signatories thereto and include covenants with respect to the voting of such shares in favor of approving the transactions contemplated by the Merger Agreement and against any competing acquisition proposals. In connection with the Akers Private Placement, participating investors holding an aggregate of 7,792,961 shares of Akers common stock, Pre-Funded Warrants to purchase 1,972,972 shares of Akers common stock, and Investor Warrants to purchase 9,765,933 shares of Akers common stock each entered into a lock-up and support agreement with Akers, pursuant to which such investors agreed, from the date of the support agreement until May 31, 2021, to vote such investors’ shares of Akers common stock in favor of each matter proposed and recommended for approval by the Akers Board of Directors or management at every stockholders’ meeting.

   
Q: Do I have any dissenters’ or appraisal rights with respect to any of the matters to be voted on at the special meeting?
   
A: No. Akers stockholders do not have any dissenters’ or appraisal rights under New Jersey law in connection with the proposed merger or with respect to any of the matters to be voted on at the special meeting.
   
Q: How does the Akers Board of Directors recommend that I vote at the special meeting?
   
A: The Akers Board of Directors recommends that you vote “FOR” the following proposals: (i) the Share Issuance Proposal, (ii) the Reverse Stock Split Proposal, (iii) the A&R Charter Proposal, (iv) the Incentive Plan Proposal, (v) the Akers Golden Parachute Compensation Proposal, (vi) the Contribution Proposal, and (vii) the Adjournment Proposal.
   
Q: What interests do Akers’ current executive officers and directors have in the merger and the Contribution Transactions?
   
A: Akers’ directors and executive officers may have interests in the merger and the Contribution Transaction that are different from, or in addition to, or in conflict with, yours. These interests include:

 

 

after the merger, all current Akers directors will serve on the board of directors of the combined company, with Mr. Silverman expected to serve as the chairman of the board, and may receive cash and other compensation from the combined company pursuant to director compensation as determined by the compensation committee of the board of directors of the combined company;

 

after the merger, Mr. Schreiber will be the executive officer of the business unit of the combined company developing the assets MYMD will acquire from Supera Pharmaceuticals, Inc., a Florida corporation (“Supera”), immediately prior to the closing of the merger (the “Supera line of business”);

  as current stockholders of Akers, certain of Akers’ directors and officers will retain an ownership stake in Akers after the closing of the merger, at which time the operations of MYMD’s business will comprise substantially all of the combined company’s operations;
  the continued indemnification of current directors and officers of Akers and the continuation of directors’ and officers’ liability insurance after the merger;
  upon the merger, the vesting of outstanding equity awards held by Akers’ officers will accelerate; and

 

Mr. Joshua Silverman, Akers’ Chairman of the Board, in his capacity as President, Chief Executive Officer and director of Oravax, has an interest in the consummation of the Contribution Transaction that may be in addition to, or different from, the interests of Akers’ stockholders generally.

 

19
 

 

These interests may influence the Akers directors in making their recommendation that you vote in favor of the approval of the Share Issuance Proposal, the Contribution Proposal and other proposals.

 

Q: What happens if I abstain from voting or fail to instruct my bank or broker?
   
A: Akers will count a properly executed proxy marked “ABSTAIN” with respect to a particular proposal as present for purposes of determining whether a quorum is present, but for purposes of approval, an abstention will have no effect on the Share Issuance Proposal, the Reverse Stock Split Proposal, the A&R Charter Proposal, the Incentive Plan Proposal, the Akers Golden Parachute Compensation Proposal, the Contribution Proposal, or the Adjournment Proposal.
   
  In addition, if you hold your shares of record and fail to submit a proxy or vote at the Akers special meeting or if you hold your shares in “street name” and fail to instruct your bank or broker how to vote with respect to any of the proposals, it will have no effect on the Share Issuance Proposal, the Reverse Stock Split Proposal, the A&R Charter Proposal, the Incentive Plan Proposal, the Akers Golden Parachute Compensation Proposal, the Contribution Proposal, or the Adjournment Proposal. Such failure to vote or submit a proxy or instruct your bank or broker how to vote will further prevent your vote from counting towards quorum, and a failure to achieve quorum will require that the meeting be adjourned. Therefore, it is imperative that you either submit a proxy or vote at the Akers special meeting or provide instructions to your bank or broker on how to vote with respect to any of the proposals.
   
Q: What will happen if I sign and return my proxy card without indicating how I wish to vote?
   
A: All proxies will be voted in accordance with the instructions contained therein. Signed and dated proxies received by Akers without an indication of how the stockholder intends to vote on a proposal will be voted in favor of each of the Share Issuance Proposal, the Reverse Stock Split Proposal, the A&R Charter Proposal, the Incentive Plan Proposal, the Akers Golden Parachute Compensation Proposal, the Contribution Proposal, and the Adjournment Proposal.
   
Q: If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?
   
A: No. If you are an Akers stockholder and your shares are held in “street name” by a broker, bank or other nominee, you will receive instructions from your brokerage firm, bank or other nominee that you must follow in order to have your shares of Akers capital stock voted. Those instructions will identify which of the above choices are available to you in order to have your shares voted. You may not vote shares held in “street name” by returning a proxy card directly to Akers or by voting at the Akers special meeting unless you provide a “legal proxy,” which you must obtain from your broker, bank or other nominee. Further, brokers, banks or other nominees who hold shares of Akers capital stock on behalf of their customers may not give a proxy to Akers to vote those shares with respect to any of the proposals without specific instructions from their customers, as brokers, banks and other nominees do not have discretionary voting power on these matters. Therefore, if you are an Akers stockholder and you do not instruct your broker, bank or other nominee on how to vote your shares, your shares will NOT be voted on any of the proposals to be voted upon at the Akers special meeting, which will have the same effect as described above under “What happens if I abstain from voting or fail to instruct my bank or broker?”
   
Q: Can I attend the Akers special meeting and vote my shares?
   
A:

Yes. All holders of Akers common stock as of the record date, including stockholders of record and stockholders who hold their shares through brokers, banks, nominees or any other holder of record, are invited to attend the Akers special meeting. Holders of record of Akers common stock can vote at the Akers special meeting by submitting their votes electronically during the special meeting. If you are not a stockholder of record, you must obtain a legal proxy, executed in your favor, from the record holder of your shares, such as a broker, bank or other nominee, to be able to vote at the Akers special meeting. If you plan to attend the Akers special meeting, you must hold your shares in your own name or have a letter from the record holder of your shares confirming your ownership.

 

20
 

 

Q: Can I change or revoke my vote?
   
A: Yes. If your shares of Akers capital stock are registered in your own name, you may revoke your proxy in one of the following ways by:
   
  Attending the Akers special meeting and voting. Your attendance at the Akers special meeting will not by itself revoke a proxy. You must vote your shares by accessing the voting link at the Akers special meeting to revoke your proxy;
   
  Voting again by telephone or over the Internet (only your latest telephone or Internet vote submitted prior to the Akers special meeting will be counted);
   
  Completing and submitting a new valid proxy card bearing a later date; or
   
  Sending notice of revocation to Akers by emailing Christopher C. Schreiber, at cschreiber@akersbio.com, which notice must be received before noon, Eastern Time, on April 14, 2021.
   
  If your shares of Akers capital stock are held in “street name,” your broker, bank or other nominee should provide instructions explaining how you may change or revoke your voting instructions.
   
Q: What should I do if I receive more than one set of voting materials?
   
A: You may receive more than one set of voting materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast your vote with respect to all of your shares.
   
Q: Who can help answer my questions?
   
A: The information provided above in this “Question and Answer” format is for your convenience only and is merely a summary of the information contained in this joint proxy and consent solicitation statement/prospectus, Akers urges you to carefully read this entire joint proxy and consent solicitation statement/prospectus, including the documents referred to herein or otherwise incorporated by reference. If you have any questions, or need additional material, please feel free to contact:

 

Akers Biosciences, Inc.:

1185 Avenue of the Americas

3rd Floor

New York, New York 10036

Attention: Corporate Secretary

Telephone: (856) 848-8698

E-mail: investors@akersbio.com

 

Or

 

Akers’ Proxy Solicitor:

Advantage Proxy, Inc.

PO Box 13581 Des Moines, WA 98198

Telephone (toll-free in North America): (877) 870-8565

Telephone (outside of North America): (206) 870-8565

Email: ksmith@advantageproxy.com

 

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Questions and Answers for MYMD Stockholders

 

Q: What will I receive in the merger?
   
A: If the merger is completed, MYMD stockholders will be entitled to receive the number of shares of Akers common stock per share of MYMD common stock they hold at the Exchange Ratio, prior to giving effect to the proposed reverse stock split contemplated by the Reverse Stock Split Proposal, or an aggregate of approximately 58,821,708 shares of Akers common stock at closing using the assumed Exchange Ratio of 0.7950 (which is subject to change depending on the net amount of cash Akers has and the number of outstanding securities of Akers and MYMD at the effective time of the merger). In addition, if any options to purchase MYMD common stock assumed by Akers and adjusted to reflect the Exchange Ratio subject to certain terms contained in the Merger Agreement are exercised during the Option Exercise Period, MYMD stockholders will receive such payment, on a pro rata basis, not later than 30 days after the last day of the Option Exercise Period, up to the maximum amount of cash consideration that may be received by MYMD stockholders without affecting the intended tax consequences of the merger. The merger consideration payable to MYMD stockholders also includes the right to receive contingent consideration payable in the form of Milestone Shares, if the combined company meets certain performance milestones with respect to its market capitalization during the Milestone Period, described further in the section titled “THE MERGER AGREEMENT — Milestone Payments” on page 169 of this joint proxy and consent solicitation statement/prospectus. Based on the assumed exchange ratio of 0.7950, the aggregate maximum number of Milestone Shares that can be issued upon achievement of such milestone events would be 58,821,708 shares, without giving effect to the proposed reverse stock split contemplated by the Reverse Stock Split Proposal. For more information, see the sections titled “THE MERGER AGREEMENT — Effects of Merger; Merger Consideration” and “THE MERGER AGREEMENT — Milestone Payments” on pages 169 and 169 of this joint proxy and consent solicitation statement/prospectus.
   
Q: Will the value of the merger consideration change between the date of this joint proxy and consent solicitation statement/prospectus and the time the merger is completed?
   
A: No. The Merger Agreement contains an Exchange Ratio that will be appropriately adjusted to reflect fully the effect of any stock split, reverse split, stock dividend (including any dividend or distribution of securities convertible into Akers common stock or MYMD common stock), reorganization, recapitalization or other like change with respect to Akers common stock or MYMD common stock or issuance of Akers common stock or MYMD common stock occurring after the date of the Merger Agreement and prior to the effective time. However, pursuant to the Exchange Ratio, if MYMD issues any additional shares of capital stock prior to the effective time of the merger and other than as contemplated by the Merger Agreement, then the value of the merger consideration will be reduced for each MYMD stockholder.
   
Q: What will happen to the MYMD Incentive Plan and Stock Options?
   
A: At the effective time of the merger, Akers will assume all of MYMD’s rights and obligations under the stock options granted pursuant to MYMD’s Second Amendment to Amended & Restated 2016 Stock Incentive Plan, as amended and restated from time to time (the “MyMD Incentive Plan”), that are outstanding immediately prior to the effective time of the merger, and such options shall become exercisable for shares of Akers common stock. The term of each such option will be amended to expire on the second anniversary of the effective date of the merger, and the number of shares of Akers common stock that may be purchased pursuant to such stock options and the exercise price for such stock options shall be determined by the formula set forth in the Merger Agreement. For more information, see the section titled “THE MERGER AGREEMENT — Treatment of MYMD Stock Options” beginning on page 168 of this joint proxy and consent solicitation statement/prospectus.
   
Q: What are the U.S. federal income tax consequences of the merger to MYMD common stockholders?
   
A: A MYMD common stockholder whose MYMD common stock is exchanged for Akers common stock in the merger, should generally not recognize any taxable gain or loss except to the extent of the lesser of the gain realized in the merger and the amount of Additional Consideration received (less the amount treated as imputed interest). In such case, (i) a MYMD common stockholder’s aggregate tax basis in the Akers common stock received in the merger will equal the aggregate tax basis of the corresponding MYMD common stock surrendered by such stockholder in the merger, plus the amount of any gain recognized, reduced by the amount of any Additional Consideration received (less than the amount treated as imputed interest); and (ii) a MYMD common stockholder’s holding period for the Akers common stock received in the merger will include the holder’s holding period for the corresponding MYMD common stock surrendered in the merger. Additional stock consideration received by a MYMD common stockholder upon the achievement of a given milestone event shall be considered to be an adjustment to the merger consideration. Accordingly, such amounts shall be allocated basis and receive a “tacked” holding period.

 

22
 

 

  For a more complete discussion of the material U.S. federal income tax consequences of the merger, see the section titled “CERTAIN MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER” on page 215 of this joint proxy and consent solicitation statement/prospectus.
   
Q: What am I being asked to approve?
   
A: You are being asked to adopt the Merger Agreement and thereby approve the merger and the other transactions contemplated by the Merger Agreement, which we refer to as the MYMD Merger Proposal. See the section titled “THE MERGER AGREEMENT” beginning on page 167 for additional information.
   
Q: What is the record date and what does it mean?
   
A: The record date to determine the MYMD stockholders entitled to notice of solicitation of written consent is the close of business on March 18, 2021. If you are a stockholder of MYMD on the record date, you are entitled to notice of and to provide written consent to the MYMD Merger Proposal. The record date was established by MYMD’s board of directors as permitted by Florida law.
   
Q: Who is entitled to give a written consent?
   
A: MYMD stockholders of record as of the record date are entitled to vote on the MYMD Merger Proposal by written consent.
   
Q: What approval is required to adopt the MYMD Merger Proposal?
   
A: Approval is required from the holders of at least seventy-five percent (75%) of the issued and outstanding shares of MYMD common stock to approve the MYMD Merger Proposal.
   
  In accordance with the terms of the Merger Agreement, (i) certain executive officers, directors and stockholders of MYMD (solely in their respective capacities as MYMD stockholders) holding approximately 61% of the outstanding MYMD common stock have entered into the MYMD Voting Agreements with Akers to vote all of their shares of MYMD common stock in favor of adoption of the Merger Agreement and (ii) certain executive officers and directors of Akers (solely in their respective capacities as Akers stockholders) holding approximately 1% of the outstanding Akers common stock have entered into the Akers Voting Agreements with MYMD to vote all of their shares of Akers common stock in favor of approval of the Merger Agreement. The Voting Agreements include covenants with respect to the voting of such shares in favor of approving the transactions contemplated by the Merger Agreement and against any competing acquisition proposals. As of the record date, the directors and executive officers of MYMD were, in the aggregate, beneficial owners of 5.31% of the outstanding shares of MYMD common stock.
   
Q: Can I dissent and require appraisal of my shares?
   
A: Yes. A MYMD stockholder will have the right to seek appraisal of the fair value of such MYMD stockholder’s shares of MYMD common stock if the merger is completed, in lieu of receiving the per share merger consideration, but only if such MYMD stockholder does not sign and return a written consent to the MYMD Merger Proposal and otherwise complies with the procedures of Sections 607.1301 through 607.1340 of the Florida Business Corporation Act (“FBCA”), which is the appraisal rights statute applicable to Florida corporations. A copy of the full text of those sections is included as Annex E to this joint proxy and consent solicitation statement/prospectus. For further information, see “THE MERGER — Appraisal Rights” on page 162 of this joint proxy and consent solicitation statement/prospectus.
   
Q: Why is my written consent important?
   
A: The Merger Agreement and the transactions contemplated thereby, including the merger, cannot be consummated unless the requisite approval of MYMD stockholders is obtained.

 

23
 

 

Q: How do I return my written consent?
   
A:

You may provide your written consent to the MYMD Merger Proposal by completing, dating and signing the written consent furnished with this joint proxy and consent solicitation statement/prospectus, and promptly returning it to MYMD. Once you have completed, dated and signed the written consent, you may deliver it to MYMD by faxing it to (813) 527-0500, by emailing a .pdf copy of your written consent to jamcnulty@mymd.com, or by mailing your written consent to MyMD Pharmaceuticals, Inc., 324 S. Hyde Park Ave., Suite 350, Tampa, FL 33606, Attention: James A. McNulty, CPA.

   
Q: What is the deadline for returning MYMD written consents?
   
A:

April 10, 2021.

   
Q: What if I am a record holder and return my signed written consent without indicating a decision with respect to the MYMD Merger Proposal?
   
A: If you are a MYMD stockholder as of the record date and you return an executed written consent without indicating your decision on the MYMD Merger Proposal, you will be deemed to have given your consent to approve the MYMD Merger Proposal.
   
Q: What if I am a record holder and do not return my consent?
   
A: If you are a MYMD stockholder as of the record date and you do not return your executed written consent, it will have the same effect as a vote against the MYMD Merger Proposal.
   
Q: Can I change or revoke my written consent?
   
A: No. Your written consent, as evidenced by your signing and returning the written consent furnished with this joint proxy and consent solicitation statement/prospectus is irrevocable once it is received by MYMD as explained in this joint proxy and consent solicitation statement/prospectus. For more information, see “MYMD SOLICITATION OF WRITTEN CONSENT — Executing Consents; Revocation of Consents” on page 137 of this joint proxy and consent solicitation statement/prospectus.
   
Q: What is MYMD’s board of directors’ recommendation for the MYMD Merger Proposal?
   
A: MYMD’s board of directors recommends that MYMD stockholders approve the MYMD Merger Proposal by executing and delivering the written consent furnished with this joint proxy and consent solicitation statement/prospectus. MYMD’s board of directors believes the merger consideration provided to MYMD’s stockholders, as well as the terms and provisions of the Merger Agreement and MYMD’s consummation of the merger, is advisable and fair to and in the best interests of MYMD and its stockholders.
   
Q: Should I send in my MYMD stock certificates now?
   
A: No. Please do not send in your MYMD stock certificates with your written consent. After the effective time of the merger, an exchange agent will send you a letter of transmittal with instructions for exchanging MYMD stock certificates for the merger consideration.
   
Q: Whom may I contact if I cannot locate my MYMD stock certificate(s) after the merger?
   
A: After the effective time of the merger, an exchange agent will send you a letter of transmittal with instructions for exchanging MYMD stock certificates for the merger consideration, including instructions for completing an affidavit of lost, stolen or destroyed certificate for MYMD common stock. Promptly following receipt of a duly completed affidavit, the exchange agent will issue you shares of Akers common stock in exchange for your lost, stolen or destroyed certificate; provided, however, that Akers in its discretion and as a condition precedent to the issuance of Akers common stock, may require you to deliver a bond in such sum as it may direct as indemnity against any claim that may be made against Akers or any other party with respect to the certificate alleged to have been lost, stolen or destroyed.
   
Q: Who can help answer my questions?
   
A:

The information provided above in this “Question and Answer” format is for your convenience only and is merely a summary of the information contained in this joint proxy and consent solicitation statement/prospectus. MYMD urges you to carefully read this entire joint proxy and consent solicitation statement/prospectus, including the documents referred to herein or otherwise incorporated by reference. If you have any questions, or need additional material, please feel free to contact James A. McNulty, CPA, Chief Executive Officer, Chief Financial Officer, Treasurer and Secretary of MYMD, at (813) 864-2566 or jamcnulty@mymd.com.

 

24
 

 

SUMMARY

 

This summary highlights selected information from this joint proxy and consent solicitation statement/prospectus and may not contain all of the information that is important to you. You are urged to carefully read this entire document, including the Annexes, and the other documents to which Akers and MYMD refer for a more complete understanding of the merger. In addition, Akers and MYMD encourage you to read the information about Akers in the section titled “Information About Akers” beginning on page 218 of this joint proxy and consent solicitation statement/prospectus, which includes important business and financial information about Akers, and to read the information in the section titled “Information About MYMD” beginning on page 237 of this joint proxy and consent solicitation statement/prospectus, which includes important business and financial information about MYMD. Stockholders of Akers and MYMD may obtain additional information about Akers without charge by following the instructions in the section titled “Where You Can Find More Information” beginning on page 288 of this joint proxy and consent solicitation statement/prospectus. Each item in this summary refers to the page of this joint proxy and consent solicitation statement/prospectus on which that subject is discussed in more detail.

 

This summary and the balance of this document contain forward-looking statements about events that are not certain to occur, and you should not place undue reliance on those statements. Please carefully read “Cautionary Statement Regarding Forward-Looking Statements” on page 109 of this document.

 

The Companies (see page 112)

 

Akers Biosciences, Inc.

1185 Avenue of the Americas

3rd Floor

New York, New York 10036

(856) 848-8698

 

Akers was incorporated in 1989 in the State of New Jersey under the name “A.R.C. Enterprises, Inc,” which was changed to “Akers Research Corporation” on September 28, 1990 and “Akers Laboratories, Inc.” on February 24, 1996. Pursuant to the Amended and Restated Certificate of Incorporation filed on March 26, 2002, the corporation’s name was changed to “Akers Biosciences, Inc.”

 

Akers was historically a developer of rapid health information technologies. On March 23, 2020, Akers entered into that certain membership interest purchase agreement (the “Original MIPA” and, as subsequently amended by Amendment No. 1 on May 14, 2020, the “MIPA”) with the members of Cystron (the “Cystron Sellers”), pursuant to which Akers acquired 100% of the membership interests of Cystron (the “Cystron Membership Interests”). Cystron is a party to a license agreement with Premas Biotech PVT Ltd. (“Premas”) whereby Premas granted Cystron, amongst other things, an exclusive license with respect to Premas’ vaccine platform for the development of a vaccine against SARS-CoV-2, a coronavirus currently causing a pandemic throughout the world (“COVID-19”), and other coronavirus infections. Since its entry into the MIPA, Akers has been primarily focused on the rapid development and manufacturing of a COVID-19 vaccine candidate (the “COVID-19 Vaccine Candidate”), in collaboration with Premas. Akers common stock trades on The Nasdaq Capital Market under the symbol “AKER”.

 

Akers’ principal executive offices are located at 1185 Avenue of the Americas, 3rd Floor, New York, New York 10036, its telephone number is (856) 848-8698, and its website is located at www.akersbio.com. Information on or accessed through Akers’ website is not incorporated into this joint proxy and consent solicitation statement/prospectus.

 

Additional information about Akers can be found in the sections titled “INFORMATION ABOUT AKERS — Overview” beginning on page 218, “INFORMATION ABOUT AKERS — Akers Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on page 230 and Akers’ financial statements included elsewhere in this joint proxy and consent solicitation statement/prospectus.

 

XYZ Merger Sub Inc.

c/o Akers Biosciences, Inc.

1185 Avenue of the Americas

3rd Floor

New York, New York 10036

(856) 848-8698

 

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XYZ Merger Sub Inc., a Florida corporation, is a wholly owned subsidiary of Akers that was recently incorporated solely for the purpose of entering into the Merger Agreement and consummating the merger and the other transactions contemplated by the Merger Agreement. It is not engaged in any business and has no material assets. Its principal executive offices have the same address and telephone number as Akers set forth above. In the merger, Merger Sub will merge with and into MYMD, with MYMD surviving as Akers’ wholly owned subsidiary, and Merger Sub will cease to exist.

 

MyMD Pharmaceuticals, Inc.

324 S. Hyde Park Ave., Suite 350

Tampa, FL 33606

(813) 864-2566

 

MyMD Pharmaceuticals, Inc. is a Florida corporation incorporated in November 2014. MYMD is a clinical stage pharmaceutical company currently focused on developing and commercializing two therapeutic platforms, MyMD-1 and Supera-1R. MyMD-1 inhibits the release of tumor necrosis factor alpha (“TNF-α”) and various other pro-inflammatory cytokines from immune cells to treat numerous autoimmune and inflammatory diseases. The development of MyMD-1 is focused on autoimmune conditions, such as multiple sclerosis, diabetes and rheumatoid arthritis; immune-mediated depression associated with COVID-19; and diseases associated with aging, such as sarcopenia (i.e., age-related muscle loss). Supera-1R is a novel derivative of cannabidiol (“CBD”), which targets the cannabinoid receptor 1 (“CB1”) and cannabinoid receptor 2 (“CB2”) and is in pre-clinical development to treat numerous conditions, such as epilepsy, chronic pain and neuropsychiatric disorders. Supera-1R is being developed by Supera Pharmaceuticals, Inc., an affiliate of MYMD, and substantially all of the assets (including all rights to Supera-1R) and certain obligations of Supera will be acquired by MYMD immediately prior to the merger in exchange for shares of MYMD common stock.

 

MYMD’s principal executive offices are located at 324 S. Hyde Park Ave., Suite 350, Tampa, FL 33606, its telephone number is (813) 864-2566, and its website is located at https://www.mymd.com. Information on or accessed through MYMD’s website is not incorporated into this joint proxy and consent solicitation statement/prospectus.

 

Additional information about MYMD can be found in the sections titled “INFORMATION ABOUT MYMD — Overview” beginning on page 237, “INFORMATION ABOUT MYMD — MYMD Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on page 259 and MYMD’s financial statements included elsewhere in this joint proxy and consent solicitation statement/prospectus.

 

The Merger (see page 140)

 

Explanatory Note Regarding the Merger Agreement

 

The following summary of the Merger Agreement, and the copy of the Merger Agreement attached as Annex A to this joint proxy and consent solicitation statement/prospectus, are intended only to provide information regarding the terms of the Merger Agreement. The Merger Agreement and the related summary are not intended to be a source of factual, business or operational information about MYMD, Akers, or Akers’ subsidiaries, and the following summary of the Merger Agreement and the copy thereof included as Annex A are not intended to modify or supplement any factual disclosure about Akers in any documents Akers has or will publicly file with the Securities Exchange Commission (“SEC”). The Merger Agreement contains representations and warranties by, and covenants of, MYMD, Akers and certain subsidiaries of Akers that were made only for purposes of the Merger Agreement and as of specified dates. The representations, warranties and covenants in the Merger Agreement were made solely for the benefit of the parties to the Merger Agreement, 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 contractual standards of materiality or material adverse effect applicable to the contracting parties that generally differ from those applicable to investors. In addition, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in Akers’ public disclosures.

 

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The Merger Agreement (see page 167 and Annex A)

 

On November 11, 2020, Akers, Merger Sub and MYMD entered into the Merger Agreement. The Merger Agreement is the legal document governing the merger and is included in this joint proxy and consent solicitation statement/prospectus as Annex A. All descriptions in this Summary and elsewhere in this joint proxy and consent solicitation statement/prospectus of the terms and conditions of the merger are qualified in their entirety by reference to the full text of the Merger Agreement. Please read the Merger Agreement carefully for a more complete understanding of the merger.

 

The Merger (see page 140)

 

At the effective time of the merger, Merger Sub, a wholly owned subsidiary of Akers, will merge with and into MYMD, with MYMD continuing as the surviving corporation and a wholly owned subsidiary of Akers. Immediately prior to the merger, Akers will change its name to “MyMD Pharmaceuticals, Inc.” and MYMD will change its name to “MyMD Pharmaceuticals (Florida), Inc.”

 

Effects of Merger; Merger Consideration (see page 167)

 

Upon the terms and subject to the conditions set forth in the Merger Agreement, upon the effectiveness of the merger, each outstanding share of MYMD common stock will be converted into the right to receive: (i) a number of shares of Akers common stock equal to the Exchange Ratio, as described below, (ii) its pro-rata portion of any Additional Consideration, as described below, and (iii) any Milestone Shares (to the extent earned). As a result of the issuance of the merger consideration and the merger and based on the assumed Exchange Ratio of 0.7950, MYMD stockholders will receive an aggregate of 58,821,708 shares of Akers common stock, without giving effect to the proposed reverse stock split contemplated by the Reverse Stock Split Proposal.

 

Each outstanding option to purchase MYMD common stock, whether vested or unvested, that has not previously been exercised, will be assumed by Akers and converted into an option to purchase shares of Akers common stock; provided that the term of such stock option will be amended to expire on the second-year anniversary of the effective time of the merger.

 

Based on the number of shares of Akers common stock outstanding as of March 12, 2021, Akers and MYMD anticipate that upon completion of the transaction and prior to the reverse stock split contemplated by the Reverse Stock Split Proposal, the combined company will have approximately 76,279,500 shares of common stock issued and outstanding (assuming issuance of 804,963 shares of common stock upon settlement of outstanding Akers RSUs at closing). Assuming the exercise in full of the Pre-funded Warrants to purchase 1,972,972 shares of Akers common stock and including 8,628,420 shares of combined company common stock underlying options to purchase MYMD common stock to be assumed at closing, and the conversion of all shares of Akers Series D Convertible Preferred Stock into underlying 72,992 shares of Akers Series D Convertible Preferred Stock, the combined company is expected to have upon completion of the transaction and prior to the reverse stock split contemplated by the Reverse Stock Split Proposal, 86,953,884 shares of common stock outstanding on a partially-diluted basis, of which (i) MYMD stockholders and optionholders will own approximately 80% of the fully diluted equity of the combined company excluding certain warrants and subject to adjustment based on Akers’ net cash at closing as further described under “THE MERGER — General” in this joint proxy and consent solicitation statement/prospectus; and (ii) Akers stockholders, holders of certain outstanding Akers options and warrants (excluding shares issuable upon exercise of options and warrants having an exercise price in excess of $1.72, prior to giving effect to any such stock splits, combinations, reorganizations and the like with respect to the Akers common stock between the announcement of the merger and the closing of the merger) and holders of outstanding Akers RSUs immediately prior to the merger will own the balance of the fully diluted equity of the combined company.

 

All shares of MYMD capital stock held by MYMD as treasury stock or otherwise will be cancelled and no payment will be made with respect to such shares.

 

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Each share of Merger Sub common stock issued and outstanding immediately prior to the effective time of the merger will convert into and become one share of common stock of the surviving corporation, which will represent all of the issued and outstanding shares of common stock of the surviving corporation immediately following the effective time of the merger.

 

After the merger is completed, MYMD stockholders will have only the right to receive the merger consideration (with any fractional shares rounded down to the nearest whole share), or, in the case of MYMD stockholders that properly exercise and perfect appraisal rights, the right to receive the fair market value of such shares, and will no longer have any rights as MYMD stockholders including voting or other rights.

 

For a full description of the merger consideration, see the sections titled “THE MERGER” beginning on page 140 and “THE MERGER AGREEMENT — Effects of Merger; Merger Consideration” beginning on page 167 of this joint proxy and consent solicitation statement/prospectus.

 

Akers’ Reasons for the Merger (see page 143)

 

In evaluating strategic alternatives, the Akers Board of Directors consulted with Akers’ management and legal and financial advisors, reviewed a significant amount of information, and considered a number of factors, including, among others, the following factors regarding the combined company that the Akers Board of Directors viewed as supportive of its decision to approve the merger with MYMD, as being in the best interests of Akers’ stockholders:

 

  It will be led by an experienced senior management team and an expanded board of directors;
     
  It will lead to additional fund-raising opportunities in the future.
     
  It will be likely to possess sufficient financial resources to allow management to continue to operate, develop and commercialize MYMD’s novel immunotherapy pipeline assets.
     
  It will likely increase in value following the merger, particularly given MYMD’s broad development program focused on two drug platforms that address enormous market potential; and
     
  It will be committed to delivering novel, multi-indication platform drugs designed to extend healthy lifespan and treat the source of chronic autoimmune diseases.

 

The Akers Board of Directors also reviewed various factors impacting the financial condition, results of operations and prospects for Akers, including:

 

  the strategic alternatives of Akers to the merger;
     
  the consequences of current market conditions, Akers’ current liquidity position, and the likelihood that the resulting circumstances of Akers would not change for the benefit of the Akers stockholders in the foreseeable future on a stand-alone basis;
     
  the risks of continuing to operate Akers on a stand-alone basis, including the need to continue to support its current business with insufficient capital resources; and
     
 

Akers’ management’s belief that it would be difficult to obtain additional equity or debt financing on acceptable terms, if at all.

 

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The Akers Board of Directors also reviewed the terms and conditions of the proposed Merger Agreement and associated transactions, as well as the safeguards and protective provisions included therein intended to mitigate risks, including:

 

  the determination that the Exchange Ratio is appropriate to reflect the expected relative percentage ownership of Akers stockholders and MYMD stockholders;
     
  the limited number and nature of the conditions to the MYMD obligation to consummate the merger and the limited risk of non-satisfaction of such conditions as well as the likelihood that the merger will be consummated on a timely basis;
     
  the respective rights of, and limitations on, Akers and MYMD under the Merger Agreement to consider certain unsolicited acquisition proposals under certain circumstances should Akers or MYMD receive a superior competing proposal;
     
  the support agreements, pursuant to which certain directors, officers and affiliated stockholders of MYMD agreed, solely in their capacity as stockholders, to vote all their shares of MYMD capital stock in favor of adoption of the Merger Agreement;
     
  the agreement of MYMD to provide the written consent of the holders of a number of shares of MYMD common stock representing at least seventy five percent (75%) of the issued and outstanding shares of MYMD common stock within ten (10) business days of the registration statement on Form S-4, of which this proxy statement/prospectus/information statement is a part, becoming effective; and
     
  the belief that the terms of the Merger Agreement, including the parties’ representations, warranties and covenants, and the conditions to their respective obligations, are reasonable under the circumstances.

 

The Akers Board of Directors believes that, overall, the potential benefits to Akers stockholders of the Merger Agreement and transactions contemplated thereby outweigh the risks and uncertainties.

 

Although this discussion of the information and factors considered by the Akers Board of Directors is believed to include the material facts it considered, it is not intended to be exhaustive and may not include all of the factors considered by the Akers Board of Director. The Akers Board of Directors did not find it useful and did not attempt to quantify or assign any relative or specific weights to the various factors that it considered in reaching its determination that the Merger Agreement and the transactions contemplated thereby are fair to, advisable, and in the best interests of Akers and its stockholders. The Akers Board of Directors based its determination on the totality of the information presented to and factors considered by it. In addition, individual members of the Akers Board of Directors may have given differing weights to different factors.

 

For a more complete discussion of Akers’ reasons for the merger, see the section titled “THE MERGER — Akers’ Reasons for the Merger.” beginning on page 143 of this joint proxy and consent solicitation statement/prospectus.

 

MYMD’s Reasons for the Merger (see page 145)

 

MYMD’s board of directors considered many factors in making its decision to approve and adopt the Merger Agreement, the merger and the other transactions contemplated by the Merger Agreement, and to recommend that MYMD’s stockholders approve the MYMD Merger Proposal. In arriving at its decision, MYMD’s board of directors consulted with MYMD’s management and scientific and technical advisors and consultants and legal and financial advisors, reviewed a significant amount of information, and reviewed a number of factors, including the following material facts (not in any relative order of importance):

 

  the expectation that the merger with Akers would be a more time- and cost-effective means than other available options, including an initial public offering or additional rounds of private financing, in order to finance the continued development and regulatory approval process with respect MYMD’s therapeutic platforms, including MyMD-1 and Supera-1R;
     
  the view that the range of options available to the combined company to access private and public equity markets will likely be greater as a public company than MYMD continuing as a privately held company;
     
  the view that the proposed merger with Akers would provide MYMD stockholders with greater liquidity and thus greater potential opportunity to realize a return on their investment than any other alternative reasonably available to MYMD and its stockholders, including the strategic alternatives to the proposed merger with Akers;

 

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  the historical and current information concerning Akers’ business, including its financial performance and condition, operations, and management;
     
  the competitive nature of the industry in which MYMD and Supera operate;
     
  the projected financial position, operations, management structure, operating plans, cash burn rate and financial projections of the combined company, and the expected cash resources of the combined company (including the ability to support the combined company’s current and planned clinical trials and operations);
     
  the likelihood that the merger would be consummated on a reasonably timely basis, including the likelihood that the merger would receive all necessary approvals;
     
  the opportunity for MYMD stockholders to hold shares of a publicly traded company, and expanding the range of potential investors MYMD could otherwise gain access to if it continued to operate as a privately held company;
     
  the availability of MYMD stockholders to seek appraisal rights under the FBCA so long as they comply with the required procedures under the FBCA, which allow such stockholders to seek appraisal of the fair value of their shares of MYMD common stock rather than to receive merger consideration and become stockholders of the combined company; and
     
  the terms and conditions of the Merger Agreement, including without limitation the following:

 

  the determination by MYMD’s board of directors that the relative percentage ownership of MYMD and Akers stockholders is fair and based on the valuations of each company at the time of MYMD’s board of directors’ approval of the Merger Agreement;
     
  the expectation that the merger will be treated as a reorganization for U.S. federal income tax purposes, with the result that in the merger, MYMD’s stockholders and optionholders would generally not recognize taxable gain or loss for U.S. federal income tax purposes;
     
  the structure of the merger and the level of certainty as to the percentage of the total shares of common stock of the combined company that current MYMD and Akers stockholders would own after the merger;
     
  the conclusion of the MYMD board of directors that MYMD’s remedies in the event of a breach or termination of the Merger Agreement by Akers were sufficient to protect the interests of MYMD and its stockholders;
     
  the guaranteed amount of unrestricted cash of the combined company on hand immediately following the effective time of the merger; and
     
  the view that the parties’ representations, warranties and covenants, and the conditions to their respective obligations, are reasonable under the circumstances.

 

For a more complete discussion of MYMD’s reasons for the merger, see the section titled “THE MERGER — MYMD’s Reasons for the Merger” beginning on page 145 of this joint proxy and consent solicitation statement/prospectus.

 

Recommendation of the Akers Board of Directors (see page 113)

 

Akers’ Board of Directors has determined that the Merger Agreement and the transactions contemplated thereby, including the merger and the issuance of Akers common stock pursuant to the terms of the Merger Agreement, and the Contribution and Assignment Agreement and the transactions contemplated thereby, are advisable and in the best interest of Akers and its stockholders and has authorized and approved the terms of the Merger Agreement and the transactions contemplated thereby. The Akers Board of Directors believes that each of the Shares Issuance Proposal, the Reverse Stock Split Proposal, the A&R Charter Proposal, the Incentive Plan Proposal, the Akers Golden Parachute Compensation Proposal, the Contribution Proposal, and the Adjournment Proposal to be presented at the special meeting are in the best interests of Akers and its stockholders, and recommends that its stockholders vote “FOR” each of the proposals. For the factors considered by the Akers Board of Directors in reaching its decision to approve the merger and Merger Agreement, see the section titled “THE MERGER — Akers’ Reasons for the Merger” beginning on page 143 of this joint proxy and consent solicitation statement/prospectus. For the factors considered by the Akers Board of Directors in reaching its decision to approve the Contribution Transaction, see the section titled “AKERS PROPOSAL 6 — Approval of the Contribution Proposal — Recommendation of the Akers Board of Directors and Reasons for the Recommendation” beginning on page 132 of this joint proxy and consent solicitation statement/prospectus.

 

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Recommendation of MYMD’s Board of Directors (see page 139)

 

MYMD’s board of directors believes the merger consideration provided to MYMD’s stockholders, as well as the terms and provisions of the Merger Agreement and MYMD’s consummation of the merger, is advisable and fair to and in the best interests of MYMD and its stockholders. MYMD’s board of directors unanimously recommends that MYMD stockholders’ consent to the adoption and approval of the Merger Agreement and the other transactions contemplated by the Merger Agreement, including the merger. For the factors considered by MYMD’s board of directors in reaching its decision to approve the merger and Merger Agreement, see the sections titled “THE MERGER — MYMD’s Reasons for the Merger” beginning on page 145 of this joint proxy and consent solicitation statement/prospectus.

 

The Akers Special Meeting (see page 113)

 

The Akers special meeting will be held on April 15, 2021 at 10:00 a.m., Eastern Time and will be “virtual,” meaning that you can participate in the meeting online at www.virtualshareholdermeeting.com/AKER2021SM at the appointed time and date. At the special meeting, Akers stockholders will be asked to consider and vote on the following:

 

(1) The Share Issuance Proposal — to approve, for purposes of complying with Nasdaq Listing Rule 5635(a), the issuance of shares of Akers common stock to MYMD stockholders in connection with the merger of Merger Sub into MYMD, including potential Milestone Payments of Milestone Shares payable upon achievement of certain market capitalization milestone events during the 36-month Milestone Period, pursuant to the terms and conditions of the Merger Agreement and the transactions contemplated thereby or in connection therewith;

 

(2) The Reverse Stock Split Proposal — to approve an amendment to the A&R Charter to effect a reverse stock split with a ratio between 1-for-1.5 and 1-for-20 with respect to the issued and outstanding common stock of the combined company immediately following the merger. The reverse stock split will increase Akers’ stock price to at least $5.00 per share, and the final reverse stock split ratio will be subject to the mutual agreement of Akers and MYMD;

 

(3) The A&R Charter Proposal — to approve the amendment and restatement of Akers’ certificate of incorporation in its entirety which will be in effect at the effective time of the merger;

 

(4) The Incentive Plan Proposal — to approve the Akers Biosciences, Inc. 2021 Equity Incentive Plan;

 

(5) The Akers Golden Parachute Compensation Proposal — to approve, on a non-binding advisory basis, the compensation that may be paid or become payable to Akers’ named executive officers in connection with the merger;

 

(6) The Contribution Proposal — to approve to approve the contribution to Oravax of (a) an amount in cash equal to $1,500,000, and, (b) cause Cystron to assign to Oravax substantially all of its assets, including the License Agreement, in exchange for a number of shares of Oravax’s capital stock equivalent to 13% of Oravax’s then outstanding capital stock on a fully diluted basis pursuant to the Contribution and Assignment Agreement; and

 

(7) The Adjournment Proposal — to consider and vote upon a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit the solicitation of additional proxies if, based upon the tabulated vote at the time of the special meeting, there are not sufficient votes to approve one or more proposals presented to stockholders for vote.

 

Only the holders of shares of Akers capital stock at the close of business on March 15, 2021, will be entitled to vote at the special meeting. Each share of Akers common stock is entitled to one vote on each proposal to be considered at the Akers special meeting. In addition, holders of outstanding shares of Series D Convertible Preferred Stock may vote at the special meeting, if such shares of Series D Convertible Preferred Stock are not converted before the special meeting. As of the Akers record date, there were 16,725,821 shares of Akers capital stock outstanding entitled to vote at the Akers special meeting.

 

Consummation of the merger is subject to certain closing conditions, including, among other things, approval by the stockholders of Akers and MYMD, the continued listing of Akers’ common stock on the Nasdaq after the merger and satisfaction of minimum net cash thresholds of Akers. In accordance with the terms of the Merger Agreement, (i) certain executive officers, directors and stockholders of MYMD (solely in their respective capacities as MYMD stockholders) holding approximately 61% of the outstanding MYMD common stock have entered into the MYMD Voting Agreements with Akers to vote all of their shares of MYMD common stock in favor of adoption of the Merger Agreement and (ii) certain executive officers and directors of Akers (solely in their respective capacities as Akers stockholders) holding approximately 1% of the outstanding Akers common stock have entered into the Akers Voting Agreements with MYMD to vote all of their shares of Akers common stock in favor of approval of the Merger Agreement. As of the close of business on the Akers record date, the directors and executive officers of Akers and its affiliates collectively beneficially owned and were entitled to vote 15,603 shares of Akers common stock, which represents, in the aggregate, less than 1% of Akers capital stock outstanding on that date. Akers currently expects that Akers’ directors and executive officers will vote their shares in favor of the Share Issuance Proposal, the Reverse Stock Split Proposal, the A&R Charter Proposal, the Incentive Plan Proposal, the Akers Golden Parachute Compensation Proposal, the Contribution Proposal, and the Adjournment Proposal. In connection with the Akers Private Placement, participating investors holding an aggregate of 7,792,961 shares of Akers common stock, Pre-Funded Warrants to purchase 1,972,972 shares of Akers common stock, and Investor Warrants to purchase 9,765,933 shares of Akers common stock each entered into a lock-up and support agreement with Akers, pursuant to which such investors agreed, from the date of the support agreement until May 31, 2021, to vote such investors’ shares of Akers common stock in favor of each matter proposed and recommended for approval by the Akers Board of Directors or management at every stockholders’ meeting.

 

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Assuming the presence of a quorum, approval of the Share Issuance Proposal (for purposes of complying with Nasdaq Listing Rule 5635(a)), the Incentive Plan Proposal, the Akers Golden Parachute Compensation Proposal, the Reverse Stock Split Proposal, the A&R Charter Proposal, the Contribution Proposal, and the Adjournment Proposal, each requires the affirmative vote of a majority of the votes cast by those shares entitled to vote on such matter. Akers will count a properly executed proxy marked “ABSTAIN” with respect to a particular proposal as present for purposes of determining whether a quorum is present. For purposes of approval, an abstention will have no effect on any of the Share Issuance Proposal, the Reverse Stock Split Proposal, the A&R Charter Proposal, the Incentive Plan Proposal, the Akers Golden Parachute Compensation Proposal, the Contribution Proposal, or the Adjournment Proposal. In addition, if a holder fails to submit a proxy or vote in person at the Akers special meeting or fails to instruct such holder’s bank or broker how to vote with respect to any of the proposals, it will have no effect on the Share Issuance Proposal, the Reverse Stock Split Proposal, the A&R Charter Proposal, the Incentive Plan Proposal, the Akers Golden Parachute Compensation Proposal, the Contribution Proposal, or the Adjournment Proposal.

 

MYMD Solicitation of Written Consent (see page 137)

 

MYMD stockholders are being asked to adopt the Merger Agreement and thereby approve the MYMD Merger Proposal by written consent.

 

Only MYMD stockholders of record on the record date will be notified of and be entitled to execute and deliver a written consent. On the record date, the outstanding securities of MYMD eligible to consent with respect to the MYMD Merger Proposal consisted of 40,053,504 shares of MYMD common stock. Under the Articles of Incorporation of MYMD, each holder of MYMD common stock is entitled to one vote for each share of common stock held of record.

 

In accordance with the terms of the Merger Agreement, (i) certain executive officers, directors and stockholders of MYMD (solely in their respective capacities as MYMD stockholders) holding approximately 61% of the outstanding MYMD common stock have entered into the MYMD Voting Agreements with Akers to vote all of their shares of MYMD common stock in favor of adoption of the Merger Agreement, and (ii) certain executive officers and directors of Akers (solely in their respective capacities as Akers stockholders) holding approximately 1% of the outstanding Akers common stock have entered into the Akers Voting Agreements with MYMD to vote all of their shares of Akers common stock in favor of approval of the Merger Agreement. The Voting Agreements include covenants with respect to the voting of such shares in favor of approving the transactions contemplated by the Merger Agreement and against any competing acquisition proposals.

 

As of the close of business on the MYMD record date, the directors and executive officers of MYMD and their affiliates collectively beneficially owned 2,742,750 shares of MYMD common stock, which represent, in the aggregate, approximately 5.31% of MYMD voting stock outstanding and entitled to vote on that date. MYMD currently expects that MYMD’s directors and executive officers will provide written consents to the MYMD Merger Proposal.

 

The adoption and approval of the MYMD Merger Proposal requires the written consent of the holders of at least 75% of the issued and outstanding shares of MYMD common stock.

 

Interests of Akers’ Directors and Executive Officers in the Merger (see page 156)

 

In considering the recommendation of the Akers Board of Directors that Akers stockholders vote to approve all of the presented proposals, Akers stockholders should be aware that certain of Akers’ directors and executive officers have interests in the merger that may be different from, or in addition to, the interests of Akers stockholders generally. These interests and arrangements may create potential conflicts of interest. The Akers Board of Directors was aware of these interests and considered them, among other matters, in approving and declaring advisable the Merger Agreement, the Contribution and Assignment Agreement, and the transactions contemplated thereby, including the merger, and in recommending that Akers stockholders approve the Share Issuance Proposal, the Reverse Stock Split Proposal, the A&R Charter Proposal, the Incentive Plan Proposal, the Akers Golden Parachute Compensation Proposal, the Contribution Proposal, and the Adjournment Proposal.

 

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When you consider the recommendation of the Akers Board of Directors in favor of approval of the Share Issuance Proposal, the Reverse Stock Split Proposal, the A&R Charter Proposal, the Incentive Plan Proposal, the Akers Golden Parachute Compensation Proposal, the Contribution Proposal, and the Adjournment Proposal, you should keep in mind that Akers’ directors and officers have interests in the merger that are different from, or in addition to, your interests as a stockholder. These interests include, among other things:

 

  after the merger, Mr. Silverman and three other current Akers directors will serve on the board of directors of the combined company and may receive cash and other compensation from the combined company pursuant to director compensation as determined by the compensation committee of the board of directors of the combined company;
 

after the merger, Mr. Schreiber will serve as an executive officer of the Supera line of business and Mr. Rhodes will serve as Chief Financial Officer, and each of them may receive cash and other compensation from the combined company related to this position;

  as current holders of restricted stock units of Akers, certain of Akers’ directors and officers will retain an ownership stake in Akers after the closing of the merger, at which time the operations of MYMD’s business will comprise substantially all of the combined company’s operations;
  the continued indemnification of current directors and officers of Akers and the continuation of directors’ and officers’ liability insurance after the merger; and
  upon the merger, the vesting of outstanding equity awards held by certain of Akers’ directors and executive officers will accelerate.

 

For a more complete description of these interests, see “THE MERGER — Interests of Akers’ Directors and Executive Officers in the Merger” beginning on page 156 of this joint proxy and consent solicitation statement/prospectus.

 

Interests of MYMD’s Directors and Executive Officers in the Merger (see page 158)

 

In considering the recommendation of MYMD’s board of directors that MYMD stockholders consent to approve the Merger Agreement and the merger, MYMD stockholders should be aware that some of MYMD’s directors and executive officers have interests in the merger and have arrangements that are different from, or in addition to, those of MYMD stockholders generally. These interests and arrangements may create potential conflicts of interest. MYMD’s board of directors was aware of these interests and considered these interests, among other matters, in adopting and approving the Merger Agreement and the transactions contemplated thereby, including the merger, and in recommending that MYMD stockholders approve the MYMD Merger Proposal.

 

When MYMD’s stockholders consider the recommendation of MYMD’s board of directors in favor of approval of the merger, MYMD’s stockholders should keep in mind that MYMD’s directors and executive officers have interests in the merger that are different from, or in addition to, the interests of its stockholders. These interests include, among other things:

 

as current stockholders of MYMD, certain of MYMD’s executive officers and directors, and entities in which they have an ownership interest, will obtain an ownership stake in Akers after the closing of the merger;

each outstanding option to acquire shares of MYMD common stock held by MYMD’s directors and executive officers, and entities in which they have an ownership interest, will be converted into an option to acquire shares of Akers common stock;

Chris Chapman, M.D., current President and Chief Medical Officer of MYMD, Adam Kaplin, M.D., Ph.D., current Chief Scientific Officer of MYMD, and Paul Rivard, current Executive Vice President of Operations and General Counsel of MYMD, are expected to be employed by the combined company as executive officers and each will receive compensation and other consideration; and
continued indemnification of current directors and officers of MYMD and expected continuation of coverage of directors’ and officers’ liability insurance after the merger.

 

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Certain of MYMD’s executive officers and each of MYMD’s directors have also entered into a support agreement, a voting agreement, and a lock-up/leak out agreement in connection with the merger. For a more detailed discussion of these agreements, see “THE MERGER — The Lock-Up/Leak-Out Agreements” beginning on page 166 of this joint proxy and consent solicitation statement/prospectus.

 

For a more complete description of these interests, see “THE MERGER — Interests of MYMD’s Directors and Executive Officers in the Merger” beginning on page 158 of this joint proxy and consent solicitation statement/prospectus.

 

Treatment of MYMD Stock Options (see page 165)

 

At the effective time of the merger, Akers will assume all of MYMD’s rights and obligations under the stock options granted pursuant to the MyMD Incentive Plan that are outstanding immediately prior to the effective time of the merger, and such options shall become exercisable for shares of Akers common stock. The term of each such option will be amended to expire on the second anniversary of the effective date of the merger, and the number of shares of Akers common stock that may be purchased pursuant to such stock options and the exercise price for such stock options shall be adjusted to reflect the Exchange Ratio as set forth in the Merger Agreement. For more information on the assumption of outstanding stock options of MYMD, see the section titled “THE MERGER AGREEMENT — Treatment of MYMD Stock Options” beginning on page 165 of this joint proxy and consent solicitation statement/prospectus.

 

Board Composition and Management of Akers After the Merger (see page 156)

 

Pursuant to the Merger Agreement, immediately after the effective time of the merger, the combined company’s board of directors will be fixed at seven members, four of whom will be directors designated by the Akers Board of Directors, and is expected to include Joshua Silverman, Akers’ current director and Chairman of the Board of Directors, as chairman of the board of directors of the combined company, as well as Christopher C. Schreiber, Bill J. White and Robert C. Schroeder, each of whom are current directors of Akers. The three remaining directors will be designated by MYMD. It is anticipated that MYMD designees will be Chris Chapman, M.D., Craig Eagle, M.D. and Jude Uzonwanne.

 

The following table lists the names and positions of the individuals who are expected to serve as executive officers and directors of the combined company upon the completion of the merger:

 

 

Name   Position(s)
Executive Officers    
Chris Chapman, M.D.   President, Chief Medical Officer and Director
Adam Kaplin, M.D., Ph.D.   Chief Scientific Officer
Christopher C. Schreiber   Executive Officer of Supera line of business and Director
Paul Rivard, Esq.   Executive Vice President of Operations and General Counsel
Ian Rhodes   Chief Financial Officer
     
Directors    
Joshua Silverman   Director; Chairman of the Board
Bill J. White   Director
Robert C. Schroeder   Director
Craig Eagle, M.D.   Director
Jude Uzonwanne   Director

 

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Following the merger, the management team of the combined company is expected to be composed of certain current members of the management team of MYMD, listed as follows:

 

Chris Chapman, M.D. – President, Chief Medical Officer and Director (principal executive officer)

 

Adam Kaplin, M.D., Ph.D. - Chief Scientific Officer

 

Paul Rivard, Esq. – Executive Vice President of Operations and General Counsel

 

Ian Rhodes – Chief Financial Officer (principal financial officer)

 

Appraisal Rights (see page 162 and Annex E)

 

If the merger is completed, MYMD stockholders are entitled to seek appraisal rights under the FBCA. In order to exercise appraisal rights, a MYMD stockholder must not provide a signed written consent in favor of the MYMD Merger Proposal and must also strictly comply with the statutory procedures of Sections 607.1301 through 607.1340 of the FBCA. A copy of the full text of those sections is included as Appendix E to this joint proxy and consent solicitation statement/prospectus. Given the complexity of Sections 607.1301 through 607.1340, MYMD stockholders are urged to read Appendix E in its entirety and to consult with their legal advisors if they wish to seek appraisal rights. Each MYMD stockholder who desires to assert his, her or its appraisal rights is cautioned that failure on his, her or its part to adhere strictly to the requirements of Florida law in any regard will cause a forfeiture of any appraisal rights of such stockholder. Any executed written consent returned that does not indicate such stockholder’s decision on the MYMD Merger Proposal will be deemed to have approved the MYMD Merger Proposal. Pursuant to the terms of the Merger Agreement, it is a condition to Akers’ and Merger Sub’s obligations to complete the merger that holders of no more than five percent (5%) of the outstanding shares of MYMD common stock immediately prior to the effective time of the merger shall have exercised, or remain entitled to exercise, appraisal rights pursuant to Sections 607.1301 through 607.1340 of the FBCA with respect to such shares of MYMD common stock.

 

For a more complete discussion of the appraisal rights, see the provisions of Sections 607.1301 through 607.1340 of the FBCA, attached to this joint proxy and consent solicitation statement/prospectus as Annex E, and the section titled “THE MERGER — Appraisal Rights” beginning on page 162 of this joint proxy and consent solicitation statement/prospectus.

 

No Solicitation (see page 175)

 

The Merger Agreement contains provisions that make it more difficult for each of Akers and MYMD to solicit, initiate, knowingly encourage, induce or knowingly facilitate the communication, making, submission or announcement of, any “acquisition proposal,” as defined in the Merger Agreement, or take any action that could reasonably be expected to lead to an acquisition proposal, including the following:

 

 

any direct or indirect merger, consolidation, amalgamation, share exchange, business combination, issuance or acquisition of securities, tender offer, exchange offer or similar transaction involving Akers or MYMD;

  any direct or indirect sale, lease, exchange, transfer, license, acquisition or disposition of any business or businesses or assets or any subsidiaries that constitute or account for 10% or more of the fair market value of the consolidated assets of Akers or MYMD, or to which 10% or more of the net revenues or net income on a consolidated basis of Akers or MYMD are attributable; or
  any liquidation or dissolution, or the declaration or payment of an extraordinary dividend of Akers or MYMD.

 

However, prior to the adoption of the Merger Agreement by the Akers stockholders, Akers is not prohibited from furnishing non-public information regarding Akers or its subsidiaries to, or entering into discussions with, any person in response to any bona fide written acquisition proposal that is, or would reasonably be expected to result in, a superior offer (which is not withdrawn), subject to certain conditions. 

 

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Conditions to Completion of the Merger (see page 171)

 

Currently, Akers and MYMD expect to complete the merger during April 2021. As more fully described in this joint proxy and consent solicitation statement/prospectus and in the Merger Agreement, each party’s obligation to complete the merger depends on a number of conditions being satisfied or, where legally permissible, waived, including the following:

 

 

there shall not have been issued any temporary restraining order, preliminary or permanent injunction or other order preventing the closing of the merger by any court of competent jurisdiction or other governmental entity of competent jurisdiction, and no action shall be taken or law, statute, resolution, ordinance, code, rule, regulation, requirement, ruling, decree or other legal requirement shall be in effect which has the effect of making the closing of the merger illegal;

     
 

all waiting periods applicable to any filing under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, by Akers, MYMD or any subsidiary applicable to the consummation of the merger will have expired or been terminated;

     
 

the holders of 75% of the issued and outstanding shares of MYMD common stock shall have duly approved the adoption of the Merger Agreement and duly approved of the merger, and the stockholders of Akers shall have duly approved the adoption of the Merger Agreement, the merger, and the transactions contemplated by the Merger Agreement, the issuance of Akers common stock in the merger, the A&R Charter Proposal, the Reverse Stock Split Proposal, and the Contribution Proposal;

     
 

the existing shares of Akers common stock shall have been continually listed on Nasdaq from the date of the Merger Agreement through the closing date of the Merger, the approval of the listing of additional shares of Akers common stock on Nasdaq shall have been obtained, and the shares of Akers common stock to be issued in the merger shall have been approved for listing on Nasdaq, subject to official notice of issuance; and

     
  the registration statement on Form S-4 (including a prospectus) in connection with the issuance of shares of Akers common stock as merger consideration in the merger, which will include a proxy statement to be sent to the stockholders of each of Akers and MYMD shall have become effective under the Securities Act, and shall not be the subject of any stop order or proceeding seeking a stop order with respect to the registration statement on Form S-4 that has not been withdrawn.

 

The obligation of Akers to complete the merger is subject to the satisfaction or waiver of the following additional conditions:

 

  certain fundamental representations and warranties of MYMD shall have been true and correct in all respects on the date of the Merger Agreement and shall be true and correct on the closing date of the merger with the same force and effect as if made on and as of the date on which the merger is to be completed or, if such representations and warranties address matters as of a particular date, then such fundamental representations and warranties shall be true and correct as of that particular date (other than, in each case, any inaccuracy or breach that is de minimis);
     
  all other representations and warranties of MYMD in the Merger Agreement and the other documents to be executed by MYMD in connection with the Merger Agreement shall have been true and correct as of the date of the Merger Agreement and shall be true and correct on the closing date of the merger with the same force and effect as if made on the date on which the merger is to be completed or, if such representations and warranties address matters as of a particular date, then such representations and warranties shall be true and correct as of that particular date, except where such inaccuracies, individually or in the aggregate, would not reasonably be expected to constitute a material adverse effect on MYMD;
     
  MYMD shall have performed or complied with in all material respects all of its covenants and agreements in the Merger Agreement and the other documents to be executed by MYMD in connection with the Merger Agreement required to be performed or complied with by it on or before the closing of the merger;
     
  MYMD shall have delivered certain certificates and other documents required under the Merger Agreement for the closing of the merger;

 

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Akers shall have received executed lock-up/leak-out agreements (the “Lock-Up/Leak-Out Agreements”) from certain stockholders of MYMD that own not less than 80% of the issued and outstanding shares of MYMD common stock immediately prior to the closing of the merger;

     
 

Holders of MYMD common stock representing less than five percent (5%) of the issued and outstanding shares of MYMD common stock shall have exercised statutory appraisal rights pursuant to 607.1302 of the FBCA;

     
 

MYMD shall have consummated the Supera Purchase;

     
  Akers shall have received an executed payoff letter from The Starwood Trust, with respect to the line of credit evidenced by the First Amended Line of Credit Agreement and Note, dated May 30, 2019, between MYMD and The Starwood Trust (the “Starwood Line of Credit”), in form and substance reasonably satisfactory to Akers, and evidence reasonably satisfactory to Akers that other indebtedness of MYMD has been paid in full;
     
 

Akers shall have received an executed support agreement from Jonnie R. Williams, Sr.;

     
 

since the date of the Merger Agreement, there shall have been no effect, change, event or circumstance that (i) has had or would reasonably be expected to have had a material adverse effect on the business, financial condition, operations or results of operations of MYMD and its subsidiaries, taken as a whole, or (ii) prevents MYMD from consummating the merger. The Merger Agreement provides that certain effects, changes, events or circumstances arising or resulting from the following, alone or in combination, shall not be considered a material adverse effect on MYMD:

 

 

general conditions affecting the industry in which MYMD or its subsidiaries operate;

     
  changes generally affecting the United States or global economy or capital markets as a whole;
     
 

any changes (after the date of the Merger Agreement) in generally accepted accounting principles in the United States of America (“GAAP”) or applicable law or other legal requirement;

     
  any hurricane, flood, tornado, earthquake, or other natural disaster, epidemic, plague, pandemic (including the COVID-19 pandemic) or other public health event or any other force majeure event, or any national or international calamity or crisis;
     
  any changes resulting from the announcement or pendency of the merger or the consummation of the transactions or compliance with the terms of the Merger Agreement; or
     
  the taking of any action, or failure to take any action, by MYMD that is expressly required by the terms of the Merger Agreement.

 

The obligation of MYMD to complete the merger is subject to the satisfaction or waiver of the following additional conditions:

 

 

certain fundamental representations and warranties of Akers and Merger Sub shall have been true and correct in all respects on the date of the Merger Agreement and shall be true and correct on the closing date of the merger with the same force and effect as if made on and as of the date on which the merger is to be completed or, if such representations and warranties address matters as of a particular date, then such fundamental representations and warranties shall be true and correct as of that particular date (other than, in each case, any inaccuracy or breach that is de minimis);

     
 

all other representations and warranties of Akers and Merger Sub in the Merger Agreement and the other documents to be executed by Akers in connection with the Merger Agreement shall have been true and correct as of the date of the Merger Agreement and shall be true and correct on the closing date of the merger with the same force and effect as if made on the date on which the merger is to be completed or, if such representations and warranties address matters as of a particular date, then such representations and warranties shall be true and correct as of that particular date, except such inaccuracies, individually or in the aggregate, would not reasonably be expected to constitute a material adverse effect on Akers and its subsidiaries, taken as a whole;

 

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Akers and Merger Sub shall have, in all material respects, performed or complied with all of their covenants and agreements in the Merger Agreement and the other documents to be executed by Akers in connection with the Merger Agreement required to be performed or complied with by them on or before the closing of the merger;

     
  Akers shall have delivered certain certificates and other documents required under the Merger Agreement for the closing of the merger;
     
 

Akers shall have delivered to MYMD written resignations of the directors of Akers or any of its subsidiaries, as applicable, who are not to continue as directors of Akers or its subsidiaries pursuant to the terms of the Merger Agreement;

     
 

Akers shall have unencumbered, unrestricted cash on hand at the closing as set forth in the Merger Agreement of at least $25,000,000 less any amounts loaned to MYMD pursuant to the Bridge Loan Note and any other amounts advanced or funded to MYMD pursuant to the Bridge Loan Advances (as defined below), which shall also include any amounts to be used to pay off The Starwood Trust to repay in full the line of credit established between MYMD and The Starwood Trust immediately at the Closing;

     
  MYMD shall have received a copy of the Lock-Up/Leak-Out Agreements from each director or executive officer of Akers as of immediately prior to the effective time of the merger and each director or executive officer of Akers who is elected or appointed as a director executive officer of Akers as of immediately following the effective time of the merger;
     
  MYMD shall have received written acknowledgements from the persons who performed services for or on behalf of Akers or is otherwise entitled to compensation from Akers as a transaction cost in connection with the merger of the transaction costs payable to such person and that upon such payment such person will have been paid in full and is not owed any other transaction costs;
     
  MYMD shall have received evidence of Akers’ compliance with its covenants with respect to employees and employee benefits matters;
     
 

Akers shall have caused all issued and outstanding preferred stock (except for the issued and outstanding shares of its Series D Convertible Preferred Stock) of Akers to be converted, redeemed, exchanged, cancelled or retired, such that at the effective time of the merger, no preferred stock of Akers is outstanding; and

     
 

since the date of the Merger Agreement, there shall have been no effect, change, event or circumstance that (i) has had or would reasonably be expected to have had a material adverse effect on the business, financial condition, operations or results of operations of Akers and its subsidiaries, taken as a whole, or (ii) prevents Akers or the Merger Sub from consummating the merger. The Merger Agreement provides that certain effects, changes, events or circumstances arising or resulting from the following, alone or in combination, shall not be considered a material adverse effect on Akers, including without limitation:

 

  conditions generally affecting the industry in which Akers operates;
     
  any hurricane, flood, tornado, earthquake, or other natural disaster, epidemic, plague, pandemic (including the COVID-19 pandemic) or other public health event or any other force majeure event, or any national or international calamity or crisis;
     
  changes generally affecting the United States or global economy or capital markets as a whole;
     
 

any changes (after the date of the Merger Agreement) in GAAP or applicable law or other legal requirement;

     
 

any change in the stock price or trading volume of Akers common stock (but not the underlying causes of such changes);

     
 

any changes resulting from the public announcement or pendency of the merger or the consummation of the transactions or compliance with the terms of the Merger Agreement; or

     
  the taking of any action, or failure to take any action, by Akers that is expressly required by the terms of the Merger Agreement.

 

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Neither Akers nor MYMD can be certain when, or if, the conditions to the merger will be satisfied or waived, or that the merger will be completed. See “THE MERGER AGREEMENT — Conditions to Closing of the Merger” on page 171 of this joint proxy and consent solicitation statement/prospectus for a more complete summary of the conditions that must be satisfied prior to closing.

 

Listing of Akers Common Stock (see page 155)

 

Akers common stock is currently listed on The Nasdaq Capital Market under the symbol “AKER”. Pursuant to the Merger Agreement, Akers has agreed to obtain approval for listing on The Nasdaq Capital Market the shares of Akers common stock to be issued in connection with the merger. In addition, under the Merger Agreement, each party’s obligation to complete the merger is subject to the satisfaction or waiver by each of the parties, at or prior to the merger, of various conditions, including that Akers must have caused such shares of Akers common stock to be approved for listing on The Nasdaq Capital Market, subject only to official notice of issuance as of the closing of the merger.

 

In connection with the merger, MYMD will change its name to “MyMD Pharmaceuticals (Florida), Inc.”, and Akers will change its name to “MyMD Pharmaceuticals, Inc.” Akers will apply to change its trading symbol on The Nasdaq Capital Market to “MYMD.”

 

Ancillary Agreements (see page 183)

 

Transaction Documents

 

In connection with the execution of the Merger Agreement, (i) MYMD entered into the Supera Asset Purchase Agreement to effectuate the Supera Purchase, the completion of which is a closing condition to the merger, (ii) Akers and MYMD entered into the Bridge Loan Note, as further described below, (iii) the officers and directors of Akers, and the officers, directors and certain stockholders of MYMD, each entered into Lock-Up/Leak-Out Agreements. which place certain restrictions on the sale or disposition of Akers common stock beneficially owned by such persons prior to or as a result of the merger, the receipt of a certain percentage of which by each of Akers and MYMD is a closing condition to the merger, (iv) each of the officers and directors of Akers entered into a voting agreement with MYMD, and (v) the officers, directors and certain stockholders of MYMD each entered into a voting agreement with Akers, which include, among other things, covenants to vote such shares in favor of approving the Merger Agreement.

 

For additional information, see “ANCILLARY AGREEMENTS” on page 183 of this joint proxy and consent solicitation statement/prospectus. Copies of the complete text of the Supera Asset Purchase Agreement, Bridge Loan Note, the Lock-up/Leak-Out Agreements and the Stockholder Voting Agreements are included in this joint proxy and consent solicitation statement/prospectus as Annexes G, H, I, J and K, respectively.

 

Supera Asset Purchase Agreement

 

On November 11, 2020, concurrently with the execution of the Merger Agreement, MYMD entered into the Supera Asset Purchase Agreement, pursuant to which Supera agreed to sell substantially all of the assets associated with its business of developing and commercializing synthetic derivatives of naturally grown cannabidiols to MYMD, immediately prior to (and contingent on) the closing of the merger. The aggregate purchase price for the purchased assets consists of 33,937,909 shares of MYMD common stock and the assumption of certain liabilities for trade accounts payable to third parties incurred in the ordinary course of business and certain liabilities under the assigned contracts to the extent performance is required after the closing of the Supera Purchase. The Supera Asset Purchase Agreement contains representations, warranties and covenants by MYMD and Supera that are typical for this type of transaction. Closing of the Supera Purchase is a condition to the obligations of Akers to effect the merger. Akers currently expects that the Supera Purchase will close immediately prior to the merger.

 

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Bridge Loan Note

 

On November 11, 2020, concurrently with the execution of the Merger Agreement, MYMD entered into the Bridge Loan Note, pursuant to which Akers agreed to provide a bridge loan of up to an aggregate principal amount of $3,000,000. Advances under the Bridge Loan Note (“Bridge Loan Advances”) are made in the amounts and at the times as needed to fund MYMD’s operating expenses, and as of filing of this joint proxy and consent solicitation statement/prospectus, Akers has made a total of $2.4 million of Bridge Loan Advances. The Bridge Loan Advances accrue interest at 5% per annum, which may be increased to 8% per annum upon occurrence of any event of default, from the date of such default. The principal and the accrued interest of the Bridge Loan Note is to be repaid upon the earliest to occur of (a) April 15, 2022; (b); if the merger is consummated, then upon demand of Akers following the consummation of the merger; or (c) the date on which the amounts due under the Bridge Loan Note are accelerated upon event of default as set forth in the Bridge Loan Note. MYMD granted Akers a first priority security interest in and lien on substantially all of the assets of MYMD as security for the Bridge Loan Note. The outstanding principal amount and the accrued interest of the Bridge Loan Note are convertible into shares of MYMD common stock in accordance with the terms of the Merger Agreement.

 

The Lock-Up/Leak-Out Agreements

 

As a condition to the closing of the merger, Akers shall have received executed Lock-Up/Leak-Out Agreements from MYMD’s directors, executive officers and certain stockholders hold not less than 80% of the issued and outstanding shares of MYMD common stock immediately prior to the closing of the merger. In connection with the execution of the Merger Agreement, MYMD’s directors, executive officers and certain stockholders, who beneficially held approximately 62% of MYMD’s capital stock as of November 11, 2020, and each of Akers’ directors and executive officers have entered into Lock-up/Leak-out agreements. The parties to the Lock-Up/Leak-Out Agreements have agreed not to, except in limited circumstances, transfer, grant an option with respect to, sell, exchange, pledge or otherwise dispose of, or encumber any shares of Akers capital stock for 180 days following the effective time of the merger. For the subsequent 180 days after the initial 180-day lock-up period, any disposal of Akers common stock must be only in accordance with the volume limitations set forth in paragraph (2) of Rule 144 promulgated under the Securities Act.

 

The Stockholder Voting Agreements

 

In accordance with the terms of the Merger Agreement, (i) certain executive officers, directors and stockholders of MYMD (solely in their respective capacities as MYMD stockholders) holding approximately 61% of the outstanding MYMD common stock entered into the MYMD Voting Agreements with Akers to vote all of their shares of MYMD common stock in favor of adoption of the Merger Agreement, and (ii) certain executive officers and directors of Akers (solely in their respective capacities as Akers stockholders) holding approximately 1% of the outstanding Akers common stock have entered into the Akers Voting Agreements with MYMD to vote all of their shares of Akers common stock in favor of approval of the Merger Agreement. The voting agreements also place certain restrictions on the transfer of the shares of Akers and MYMD, as applicable, held by the signatories thereto.

 

Lock-up and Support Agreement

 

Each of substantially all investors who participated in the Akers Private Placement that closed on November 17, 2020, entered into a lock-up and support agreement with Akers, pursuant to which such investor agreed, from the date of the support agreement until May 31, 2021, to vote the investors’ shares of Akers common stock in favor of each matter proposed and recommended for approval by the Akers Board of Directors or management at every stockholders’ meeting. Until the earlier of (a) the termination of the Merger Agreement or (b) the date that the stockholder votes its Akers shares in support of the merger and all matters related to the merger and such vote is irrevocable, each investor agreed that the investor will not, directly or indirectly, without the prior written consent of Akers, transfer, assign or dispose of the investor’s right to vote the shares or otherwise take any act that could restrict or otherwise affect its legal power, authority or right to vote all of such shares in the manner required by the support agreement.

 

The Contribution and Assignment Agreement

 

On March 18, 2021, Akers entered into a the “Contribution and Assignment Agreement by and among Akers, Cystron, and Oravax, pursuant to which Akers agreed to contribute (i) an amount in cash equal to $1,500,000 to Oravax, (ii) cause Cystron to contribute substantially all of the assets associated with its business of developing and manufacturing a COVID-19 Vaccine Candidate to Oravax, and deliver to Premas on behalf of Cystron $1,200,000 in satisfaction of all current accrued and unpaid milestone payments due pursuant the License Agreement. In addition to the cash amount equal to $1,200,000, Akers will hold for payment and delivery, an additional amount equal to $300,000 and 134,572 shares of Akers common stock and 72,922 shares of Akers Series D Convertible Preferred Stock, due to Premas, to be paid and delivered at a future date upon Premas obtaining the requisite permissions from Indian Authorities and making a demand on Akers for payment and delivery of the same. For the avoidance of doubt, the 134,572 shares of Akers common stock and 72,992 shares of Akers Series D Convertible Preferred Stock referred to in the preceding sentence were previously issued and are outstanding in the stock books of Akers registered in the name of Premas. The aggregate purchase price for the contribution consists of the Oravax Shares and the assumption of all obligations or liabilities in respect of the assets of Cystron following the closing of the Contribution Transaction, including the obligations under the License Agreement. Simultaneously with the entry into the Contribution Agreement, Oravax entered into a license agreement with Oramed. Pursuant to the license agreement, Oramed has agreed to license certain technology for the oral delivery of pharmaceuticals to Oravax and to contribute $1,500,000 in cash to Oravax effective upon the consummation of the Contribution Transaction. In consideration of Oramed’s commitments, Oravax issued 1,890,000 shares of its capital stock to Oramed. As a result of the issuance of Oravax shares to Oramed, Akers’ share ownership of Oravax is consists of 13% of Oravax’s outstanding shares of capital stock. Akers, Oramed and the other shareholders of Oravax executed a shareholder’s agreement containing customary terms. In addition, Oravax agreed to pay future royalties to Akers equal to 2.5% of all net sales of products (or combination products) manufactured, tested, distributed and/or marketed by Oravax or its subsidiaries.

 

The Contribution and Assignment Agreement contains representations, warranties and covenants by Akers, Cystron and Oravax that are typical for this type of transaction. Consummation of the transactions contemplated by the Contribution and Assignment Agreement is subject to certain conditions, including the receipt by Akers of the affirmative vote of a majority of the votes cast by those stockholders entitled to vote and present in person or by proxy.

 

Termination and Release Agreement

 

On March 18, 2020, Akers and the Cystron Sellers, which are also shareholders of Oravax, entered into a Termination and Release Agreement terminating the MIPA effective upon consummation of the Contribution Agreement. In addition, the Cystron Sellers agreed to waive any change of control payment triggered under the MIPA as a result of the merger.

 

Termination of Merger Agreement (see page 181)

 

The Merger Agreement may be terminated and the merger may be abandoned at any time prior to the effective time of the merger, whether before or after the required stockholder approvals to complete the merger and related matters have been obtained, as set forth below:

 

  by mutual written consent of MYMD and Akers duly authorized by each of their respective boards of directors;
     
 

by either Akers or MYMD if the merger has not been consummated by April 15, 2021 (the “End Date”), subject to extension as provided below (provided that the right to terminate the Merger Agreement following the End Date will not be available to any party whose failure to fulfill any obligation under the Merger Agreement has been a primary cause of the failure of the merger to occur on or before the End Date);

     
 

by either Akers or MYMD if a court of competent jurisdiction or governmental or quasi-governmental authority of any nature (including any regulatory or administrative agency or commission) will have issued a non-appealable final order, decree or ruling or taken any other action, in each case having the effect of permanently restraining, enjoining or otherwise prohibiting the merger;

     
  by Akers if MYMD stockholder approval is not obtained within ten (10) business days following the date this S-4 Registration Statement is declared effective, subject to certain exceptions;
     
 

by either Akers or MYMD, if the Akers’ special meeting has been held and the approval of Akers’ stockholders contemplated by the Merger Agreement was not obtained thereat, subject to certain exceptions;

 

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  by MYMD if the Akers Board of Directors has withdrawn or modified its recommendation to Akers stockholders to vote for the merger, the A&R Charter Proposal and the Reverse Stock Split Proposal by the Akers stockholders for a superior offer;
     
  by Akers upon breach of any of the representations, warranties, covenants or agreements on the part of MYMD set forth in the Merger Agreement or the other documents to be executed by MYMD in connection with the Merger Agreement, or if any representation or warranty of MYMD will have become inaccurate, in either case such that certain conditions in the Merger Agreement would not be satisfied as of the time of such breach or as of the time such representation or warranty will have become inaccurate; provided, however, if such breach or inaccuracy is curable by MYMD, then the Merger Agreement will not terminate as a result of such particular breach or inaccuracy unless the breach or inaccuracy remains uncured as of the thirtieth (30th) calendar day following the date of written notice given by Akers to MYMD of such breach or inaccuracy and its intention to terminate the Merger Agreement; and
     
  by MYMD upon breach of any of the representations, warranties, covenants or agreements on the part of Akers or Merger Sub set forth in the Merger Agreement or the other documents to be executed by Akers or Merger Sub in connection with the Merger Agreement, or if any representation or warranty of Akers or Merger Sub will have become inaccurate, in either case such that certain conditions set forth in the Merger Agreement would not be satisfied as of the time of such breach or as of the time such representation or warranty will have become inaccurate; provided, however, if such breach or inaccuracy is curable by Akers or Merger Sub, then the Merger Agreement will not terminate as a result of such particular breach or inaccuracy unless the breach or inaccuracy remains uncured as of the thirtieth (30th) calendar day following the date of written notice given by MYMD to Akers of such breach or inaccuracy and its intention to terminate the Merger Agreement.

 

The End Date may be extended as follows:

 

 

Akers may, upon written notice to MYMD, extend the original End Date by up to thirty (30) calendar days (to May 15, 2021) so long as (i) Akers or Merger Sub is not in material breach of the Merger Agreement and (ii) within three (3) calendar days of written request by MYMD, Parent will make an additional loan to MYMD of up to $600,000, under the same terms and conditions of the Bridge Loan Note (the “Second Bridge Loan Note”); and

     
  Akers may, upon written notice to MYMD, extend the extended End Date by up to an additional forty-five (45) calendar days (to June 30, 2021), so long as (i) Akers or Merger Sub is not in material breach of the Merger Agreement; (ii) on the effective date of such extension, the loan amount under the Bridge Loan Note and the Second Bridge Loan Note may, at the option of MYMD, be converted into shares of MYMD common stock at a per share conversion price of $2.00 (subject to adjustment for any stock split, reverse stock splits and similar changes); and (iii) Akers shall, at the request of MYMD, either (A) subscribe for 300,000 shares of MYMD common stock at a per share price of $2.00 (such amounts subject to adjustment for any stock split, reverse stock splits and similar changes) or (B) make an additional loan to MYMD of up to $600,000, under the same terms and conditions of the Bridge Loan Note (the “Third Bridge Loan Note”).

 

Termination Costs (see page 163)

 

If the Merger Agreement is terminated, other than in a termination by Akers due to (i) MYMD’s failure to obtain stockholder approval within the timeframe required by the Merger Agreement or (ii) MYMD’s breach of its representations, warranties, covenants or agreements under the Merger Agreement, then, at MYMD’s sole discretion, all or any part of the loan amounts under the Bridge Loan Note, and if any, the Second Bridge Loan Note and the Third Bridge Loan Note, will be convertible into shares of MYMD common stock at a conversion price per share of $2.00 (subject to adjustment for any stock split, reverse stock splits and similar changes), upon delivery of notice within thirty calendar days after the effective date of termination of the Merger Agreement.

 

Comparison of Rights of Akers Stockholders and MYMD Stockholders (see page 280)

 

Akers is a New Jersey corporation. MYMD is a Florida corporation. As such, the rights of Akers stockholders are governed by the laws of the State of New Jersey and the rights of MYMD stockholders are governed by the laws of the State of Florida. Additionally, the rights of Akers stockholders are governed by the Akers Charter and the Akers Bylaws, and the rights of MYMD stockholders are governed by the Articles of Incorporation of MYMD (the “MYMD Articles”) and the MYMD By-Laws (the “MYMD Bylaws”). Subject to stockholder approval, the A&R Charter, as set forth in Annex B will be in effect at the effective time of the merger and will govern the rights of the stockholders of the combined company. The rights of Akers stockholders contained in the A&R Charter and the Akers Bylaws, as amended and restated (unless approval of the A&R Charter Proposal is not obtained and the related condition to the consummation of the merger is waived), differ from the rights of MYMD stockholders under the MYMD Articles and MYMD Bylaws, as more fully described under the section titled “COMPARISON OF RIGHTS OF AKERS STOCKHOLDERS AND MYMD STOCKHOLDERS” on page 280 of this joint proxy and consent solicitation statement/prospectus.

 

41
 

 

Accounting Treatment (see page 162)

 

Although Akers is the legal acquirer and will issue shares of its common stock to effect the merger with MYMD, the business combination will be accounted for as an acquisition of Akers by MYMD under GAAP. Under the “acquisition” method of accounting, the assets and liabilities of Akers will be recorded, as of the completion of the merger, at their respective fair values in the financial statements of MYMD. The financial statements of MYMD issued after the completion of the merger will reflect these values but will not be restated retroactively to reflect the historical financial position or results of operations of Akers.

 

For a more complete discussion of the accounting treatment of the merger, see the section titled “The Merger — Accounting Treatment” on page 162 of this joint proxy and consent solicitation statement/prospectus.

 

U.S. Federal Income Tax Considerations (see page 162)

 

The merger should qualify as a “reorganization” within the meaning of Section 368(a) of the Code and Treasury Regulations promulgated thereunder. As a result of the “reorganization,” a MYMD common stockholder whose MYMD common stock is exchanged in the merger for Akers common stock should not recognize any taxable gain or loss in the merger except to the extent of lesser of the gain realized in the merger and the amount of Additional Consideration received (less the amount treated as imputed interest). Akers stockholders generally will not recognize gain or loss for U.S. federal income tax purposes as a result of the merger.

 

Tax matters are very complicated, and the tax consequences of the merger to a particular Akers or MYMD common stockholder will depend in part on such holder’s circumstances. Accordingly, Akers and MYMD urge you to consult your own tax advisor for a full understanding of the tax consequences of the merger to you, including the applicability and effect of federal, state, local and foreign income and other tax laws. For a more complete discussion of the material U.S. federal income tax consequences of the merger, see the section titled “CERTAIN MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER” on page 215 of this joint proxy and consent solicitation statement/prospectus.

 

Regulatory Approvals (see page 161)

 

Akers and MYMD believe that the merger does not raise substantial antitrust or other significant regulatory concerns and that both parties will be able to obtain all requisite regulatory approvals prior to the anticipated closing. Akers must also comply with the applicable federal and state securities laws and the rules and regulations of The Nasdaq Stock Market LLC for the approval of the listing application to be submitted in connection with the issuance of shares of Akers common stock in the merger and the filing with the SEC of the registration statement of which this joint proxy and consent solicitation statement/prospectus forms a part. For a more complete discussion of the regulatory approvals required in connection with the merger, see the section titled “THE MERGER — Regulatory Approvals Required for the Merger” on page 161 of this joint proxy and consent solicitation statement/prospectus.

 

Opinion of Akers’ Financial Advisor (see page 148, Annex F and Annex M)

 

On November 11, 2020, Gemini Valuation Services, LLC (“GVS”) rendered its oral opinion to Akers’ Board of Directors (which was subsequently confirmed in writing as of November 11, 2020) (the “GVS Opinion”), as of November 11, 2020, as to the fairness, from a financial point of view, of the contribution made and consideration received by the holders of Akers common stock pursuant to the Merger Agreement.

 

42
 

 

The GVS Opinion was addressed to Akers’ Board of Directors in connection with its consideration of the merger. GVS’ opinion addressed solely the fairness, from a financial point of view, of the consideration received by the holders of Akers common stock pursuant to the Merger Agreement to the holders of Akers common stock. It did not address any other aspect or implication of the merger. The summary of the opinion in this joint proxy and consent solicitation statement/prospectus is qualified in its entirety by reference to the full text of the written opinion, which is included as Annex F, as reaffirmed by the Affirmation Letter dated March 18, 2021, which is included as Annex M to this joint proxy and consent solicitation statement/prospectus and sets forth the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by GVS in preparing its opinion. Neither the GVS Opinion nor the summary of the opinion and related analyses set forth in this joint proxy and consent solicitation statement/prospectus is intended to and they do not constitute a recommendation to Akers’ Board of Directors or any stockholder of Akers as to how to vote or to take any other action in connection with the merger.

 

For further information, see the section titled “THE MERGER — Opinion of Akers’ Financial Advisor” beginning on page 148 and the full text of the opinion attached as Annex F and Affirmation Letter, attached as Annex M to this joint proxy and consent solicitation statement/prospectus.

 

Summary of Risk Factors (see page 55)

 

Below is a summary of the principal risk factors related to the merger and the combined company. This summary does not address all of the risks related to the merger and the combined company. Additional discussion of the risks summarized in this summary of risk factors, and other risks related to the businesses of Akers and MYMD, can be found below under the heading “Risk Factors” and should be carefully considered, together with other information in this joint proxy and consent solicitation statement/prospectus before deciding how to vote.

 

Risks Related to the Proposed Merger and the Contribution Transaction

 

  The ongoing COVID-19 pandemic may pose risks and could harm business and results of operations for each of Akers, MYMD, and the combined company following the completion of the merger.
  There is no assurance when or if the merger will be completed. Any delay in completing the merger may substantially reduce the potential benefits that Akers and MYMD expect to obtain from the merger. Furthermore, the intended benefits of the merger may not be realized.
  The issuance of shares of Akers common stock to MYMD stockholders in the merger will substantially dilute the voting power of current Akers stockholders. Having a minority share position will reduce the influence that current stockholders have on the management of Akers.
  The issuance, or expected issuance, of Akers common stock in connection with the merger, including the Milestone Shares, could decrease the market price of Akers common stock.
  Because the lack of a public market for MYMD common stock makes it difficult to evaluate the fairness of the merger, MYMD stockholders may receive consideration in the merger that is greater than or less than the fair market value of MYMD common stock.
  Directors and officers of Akers and MYMD may have interests in the merger that are different from, or in addition to, those of Akers stockholders and MYMD stockholders generally that may influence them to support or approve the merger.
  If the merger is completed, MYMD executive officers and MYMD appointees to the combined company’s board of directors will have the ability to significantly influence the combined company’s management and business affairs, as well as matters submitted to the combined company’s board of directors or stockholders for approval, especially if they decide to act together with the current MYMD stockholders.
  The announcement and pendency of the merger could have an adverse effect on Akers’ or MYMD’s business, financial condition, results of operations or business prospects.
  During the pendency of the merger, Akers or MYMD may not be able to enter into a business combination with another party and will be subject to contractual limitations on certain actions because of restrictions in the Merger Agreement.
  Certain provisions of the Merger Agreement may discourage third parties from submitting competing proposals, including proposals that may be superior to the arrangements contemplated by the Merger Agreement.

 

43
 

 

  The Exchange Ratio is not adjustable based on the market price of Akers common stock, so the merger consideration at the closing may have a greater or lesser value than at the time the Merger Agreement was signed.
  Akers is expected to incur substantial expenses related to the merger with MYMD.
  Failure to complete the merger could negatively affect the value of Akers common stock and the future business and financial results of both Akers and MYMD.
  The merger may be completed even though material adverse changes may result from the announcement of the merger, industry-wide changes or other causes.
  Akers and MYMD may become involved in additional securities litigation or stockholder derivative litigation in connection with the merger, and this could divert the attention of Akers and MYMD management and harm the combined company’s business, and insurance coverage may not be sufficient to cover all related costs and damages.
  The failure to consummate the Contribution Transaction may materially and adversely affect Akers’ business, financial condition and results of operations.

 

Risks Related to the Reverse Stock Split

 

  The reverse stock split may not increase the combined company’s stock price over the long term.
  The reverse stock split would have the effect of increasing the amount of common stock that the combined company is authorized to issue without further approval by the combined company’s stockholders.
  The reverse stock split may decrease the liquidity of Akers’ common stock and lead to a decrease in overall market capitalization of the combined company.

 

Risks Related to the Combined Company Following the Merger

 

  Akers stockholders and MYMD stockholders may not realize a benefit from the merger commensurate with the ownership dilution they will experience in connection with the merger.
  The market price of the combined company’s common stock after the merger may be subject to significant fluctuations and volatility, and the stockholders of the company may be unable to resell their shares at a profit and may incur losses.
  If the merger is consummated, the business operations, strategies and focus of Akers will fundamentally change, and these changes may not result in an improvement in the value of its common stock.
  The combined company may issue additional equity securities in the future, which may result in dilution to existing investors.
  The concentration of the capital stock ownership with insiders of the combined company after the merger will likely limit the ability of the stockholders of the combined company to influence corporate matters.
  The sale or availability for sale of a substantial number of shares of common stock of the combined company after the merger and after expiration of the lock-up period could adversely affect the market price of such shares after the merger.
  The combined company may not be able to adequately protect or enforce its intellectual property rights, which could harm its competitive position.
  Subsequent to the consummation of the merger, the combined company may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on its financial condition, results of operations and stock price, which could cause you to lose some or all of your investment.
  Akers and MYMD do not anticipate that the combined company will pay any cash dividends in the foreseeable future.
  In the event that the combined company fails to satisfy any of the listing requirements of The Nasdaq Capital Market, its common stock may be delisted, which could affect its market price and liquidity.
  An active trading market for combined company common stock may not develop.
  The combined company may acquire businesses or products, or form strategic alliances, in the future, and may not realize the benefits of such acquisitions.

 

In addition, Akers and MYMD face other business, financial operational, and legal risks and uncertainties discussed in the sections titled “—Risks Related to MYMD’s Financial Position,” “—Risks Related to MYMD’s Product Development and Regulatory Approval,” “—Risks Related to Commercialization and Manufacturing,” “—Risks Related to Government Regulation,” “—Risks Related to MYMD’s Intellectual Property,” “Risks Related to Employee Matters, Managing Growth and Other Risks Related to MYMD’s Business,” “—Risks Related to the Business of Akers Prior to the Consummation of the Merger and the Contribution Transaction,” and “—Risks Related to Akers’ Financial Position and Need for Additional Capital.”

 

44
 

 

SELECTED HISTORICAL FINANCIAL INFORMATION OF AKERS

 

The following table sets forth selected historical financial information of Akers for each of the periods presented. Such information has been derived from Akers’ audited consolidated financial statements as of and for the years ended December 31, 2020 and 2019, each of which is included elsewhere in this joint proxy and consent solicitation statement/prospectus.

 

The following tables should be read together with “INFORMATION ABOUT AKERS — Akers’ Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on page 230 of this joint proxy and consent solicitation statement/prospectus and Akers’ audited consolidated financial statements as of and for the years ended December 31, 2020 and 2019 and related notes beginning on page F-1 of this joint proxy and consent solicitation statement/prospectus.

 

Akers’ historical results are not necessarily indicative of results to be expected in any future period.

 

45
 

 

AKERS BIOSCIENCES, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2020 and 2019

 

    As of  
    December 31,     December 31,  
    2020     2019  
ASSETS                
Current Assets                
Cash and Cash Equivalents   $ 18,617,955     $ 517,444  
Marketable Securities     16,718,452       9,164,273  
Other Receivables     1,200,009       -  
Prepaid expenses     294,343       334,059  
Current assets of discontinued operations     12,002       295,038  
                 
Total Current Assets     36,842,761       10,310,814  
                 
Non-Current Assets                
Restricted Cash     -       115,094  
Other Assets     -       2,722  
Non-current assets of discontinued operations     -       456,305  
                 
Total Non-Current Assets     -       574,121  
                 
Total Assets   $ 36,842,761     $ 10,884,935  
                 
LIABILITIES                
Current Liabilities                
Trade and Other Payables   $ 2,203,902     $ 891,883  
Current liabilities of discontinued operations     59,393       637,882  
                 
Total Current Liabilities     2,263,295       1,529,765  
                 
Total Liabilities   $ 2,263,295     $ 1,529,765  
                 
Commitments and Contingencies                
                 
SHAREHOLDERS’ EQUITY                
Preferred Stock, No par value, 50,000,000 total preferred shares authorized     -       -  
Series A Convertible Preferred Stock, 10,000,000 shares designated, $0.001 par value and a stated value of $0.0725 per share, 0 shares issued and outstanding as of December 31, 2020 and December 31, 2019     -       -  
Series C Convertible Preferred Stock, 1,990,000 shares designated, no par value and a stated value of $4.00 per share, 0 shares issued and outstanding as of December 31, 2020 and December 31, 2019     -       -  
Series D Convertible Preferred Stock, 211,353 shares designated, no par value and a stated value of $0.01 per share, 72,992 and 0 shares issued and outstanding as of December 31, 2020 and December 31, 2019     144,524       -  
Series E Junior Participating Preferred Stock, 100,000 shares designated, no par value and a stated value of $0.001 per share, 0 shares issued and outstanding as of December 31, 2020 and December 31, 2019     -       -  
Common stock, No par value, 100,000,000 shares authorized 17,585,261 and 1,738,837 issued and outstanding as of December 31, 2020 and December 31, 2019     171,598,681       128,920,414  
Accumulated Other Comprehensive Income     -       17,886  
Accumulated Deficit     (137,163,739 )     (119,583,130 )
                 
Total Shareholders’ Equity     34,579,466       9,355,170  
                 
Total Liabilities and Shareholders’ Equity   $ 36,842,761     $ 10,884,935  

 

46
 

 

AKERS BIOSCIENCES, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Loss

 

    For the Years Ended December 31,  
    2020     2019  
             
Product Revenue   $ -     $ -  
Product Cost of Sales     -       -  
                 
Gross Income     -       -  
                 
Administrative Expenses     4,299,062       3,372,103  
Sales and Marketing Expenses     22,963       25,000  
Research and Development Expenses     7,963,678       -  
Litigation Settlement Expenses     -       75,000  
Loss from Operations     (12,285,703 )     (3,472,103 )
                 
Other (Income) Expenses                
Loss on Disposal of Non-Current Assets     3,042       9,576  
Foreign Currency Transaction (Gain) Loss     (93 )     5,051  
Gain on Fair Market Value Change of Equity Investments     (54,100 )     -  
(Gain) Loss on Investments     36,714       (3,952 )
Interest and Dividend Income     (119,052 )     (101,483 )
Total Other Income     (133,489 )     (90,808 )
                 
Loss Before Income Taxes     (12,152,214 )     (3,381,295 )
                 
Income Tax Benefit     -       -  
                 
Net Loss from Continuing Operations     (12,152,214 )     (3,381,295 )
                 
Net Loss from Discontinued Operations     (5,428,395 )     (506,954 )
                 
Net Loss     (17,580,609 )     (3,888,249 )
                 
Other Comprehensive Income (Loss)                
Net Unrealized Gain on Marketable Securities     -       43,799  
Total Other Comprehensive Income     -       43,799  
                 
Comprehensive Loss   $ (17,580,609 )   $ (3,844,450 )
                 
Basic and Diluted Loss per Common Share from Continuing Operations   $ (1.72 )   $ (5.52 )
                 
Basic and Diluted Loss per Common Share from Discontinued Operations   $ (0.77 )   $ (0.83 )
                 
Basic and Diluted Loss per Common Share   $ (2.49 )   $ (6.35 )
                 
Weighted average basic and diluted common shares outstanding     7,052,686       612,672  

  

47
 

 

SELECTED HISTORICAL FINANCIAL INFORMATION OF MYMD

 

The following table sets forth selected historical financial information of MYMD for each of the periods presented. Such information has been derived from MYMD’s audited financial statements as of and for the years ended December 31, 2020 and 2019, each of which is included elsewhere in this joint proxy and consent solicitation statement/prospectus.

 

The following table should be read together with “INFORMATION ABOUT MYMD — MYMD Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on page 259 of this joint proxy and consent solicitation statement/prospectus and MYMD’s audited financial statements as of and for the years ended December 31, 2020 and 2019 and related notes beginning on page F-86 of this joint proxy and consent solicitation statement/prospectus.

 

MYMD’s historical results are not necessarily indicative of results to be expected in any future period.

 

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MyMD Pharmaceuticals, Inc.

 

Statement of Operations Data

 

   December 31,   December 31, 
   2020   2019 
Revenues  $-   $- 
           
Operating Costs:          
General and administrative expenses  (including $855,000, $3,577,550 of share-based compensation for 2020 and 2019, respectively)   3,304,673    5,764,986 
Research and development expenses   2,241,431    3,627,739 
Option modification expense   2,009,145    - 
Total Operating Costs   7,555,249    9,392,725 
           
Interest expense   (1,375,216)   (246,191)
Net Loss  $(8,930,465)  $(9,638,916)

  

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MyMD Pharmaceuticals, Inc.

 

Balance Sheet Information

 

   December 31,   December 31, 
   2020   2019 
ASSETS          
Current Assets:          
Cash  $133,733   $132,023 
Prepaid expenses and other current assets   1,218    17,472 
Total Current assets   134,951    149,495 
           
Intangible Assets   -    18,334 
Total Assets  $134,951   $167,829 
           
LIABILITIES AND STOCKHOLDERS’ DEFICIT          
Trade accounts payable  $1,025,063   $878,620 
Due to Related Party   39,177    14,577 
Accrued interest, related party   175,679    10,639 
Loan Payable, related party   1,200,000    - 
Paycheck Protection Program Loan   54,000    - 
Total Current Liabilities   2,493,919    903,836 
           
Line of credit, related party, net of unamortized debt discount   1,734,237    990,355 
           
Total Liabilities   4,228,156    1,894,191 
           
Stockholders’ Deficit          
Common Stock $.0001 par value, 90,000,000 shares authorized 40,043,504 and 38,063,504 issued and outstanding as of December 31, 2020, and December 31, 2019, respectively   4,004    3,806 
Additional Paid in Capital   43,411,488    36,848,064 
Accumulated Deficit   (47,508,697)   (38,578,232)
Total Stockholders’ Deficit   (4,093,205)   (1,726,362)
Total Liabilities and Stockholders’ Deficit  $134,951   $167,829 

  

50
 

 

SELECTED HISTORICAL FINANCIAL INFORMATION OF SUPERA

 

The following table sets forth selected historical financial information of Supera for each of the periods presented. Such information has been derived from Supera’s audited financial statements as of and for the years ended December 31, 2020 and 2019, each of which is included elsewhere in this joint proxy and consent solicitation statement/prospectus.

 

The following table should be read together with “INFORMATION ABOUT MYMD — Supera Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on page 266 of this joint proxy and consent solicitation statement/prospectus and Supera’s audited financial statements as of and for the years ended December 31, 2020 and 2019 and related notes beginning on page F-70 of this joint proxy and consent solicitation statement/prospectus.

 

Supera’s historical results are not necessarily indicative of results to be expected in any future period.

 

Supera Pharmaceuticals, Inc.

 

Statement of Operations Data

 

   December 31,   December 31, 
   2020   2019 
         
Revenues  $-   $- 
           
Operating Costs:          
Travel and jet expenses   923,383    1,412,615 
General and administrative expenses   330,004    192,300 
Research and development expenses   85,901    232,484 
Total Operating Costs   1,339,288    1,837,399 
           
Other Expense (Income)          
Travel expense reimbursements from affiliate   (808,300)   (1,364,061)
Interest expense   27,528    2,599 
    (780,772)   (1,361,462)
           
Net Loss  $(558,516)  $(475,937)

  

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Supera Pharmaceuticals, Inc.

 

Balance Sheet Information

 

   December 31,   December 31, 
   2020   2019 
ASSETS          
Current Assets:          
Cash  $14,551   $2,476 
Due from affiliate   24,600    - 
Total Assets  $39,151   $2,476 
           
LIABILITIES AND STOCKHOLDERS’ DEFICIT          
Trade accounts payable  $556,781   $145,494 
Due to affiliate   -    14,849 
Paycheck Protection Program Loan   16,600    - 
Total Current Liabilities   573,381    160,343 
           
Related party line of credit   599,747    444,516 
Related party interest payable   29,628    2,706 
Total Liabilities   1,202,756    607,565 
           
Stockholders’ Deficit          
Common Stock $0.0001 par value, 100,000,000 shares  authorized and 25,000,000 issued and outstanding   -    - 
Additional paid-in capital   -    - 
Accumulated Deficit   (1,163,605)   (605,089)
Total Stockholders’ Deficit   (1,163,605)   (605,089)
Total Liabilities and Stockholders’ Deficit  $39,151   $2,476 

  

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SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA

  

The following selected unaudited pro forma condensed combined financial data as of and for the year ended December 31, 2020, give effect to the proposed merger of Merger Sub with and into MYMD, and have been prepared under the acquisition method of accounting with MYMD treated as the accounting acquirer. MYMD is anticipated to be the accounting acquirer based upon the terms of the merger and other factors, such as the number of shares to be issued to MYMD stockholders under the Merger Agreement upon closing of the merger, relative voting rights and the composition of the combined company’s senior management. The following selected unaudited pro forma condensed financial data also give effect to the Supera Purchase and the Contribution Transaction. The following selected unaudited pro forma condensed financial data does not give effect to the issuance of the Milestone Shares or the Additional Consideration.

 

The selected unaudited pro forma condensed combined financial data presented below are based on, and should be read in conjunction with, the unaudited pro forma condensed combined financial statements that appear elsewhere in this joint proxy and consent solicitation statement/prospectus, including the footnotes thereto, and the historical financial statements of MYMD and Akers that appear elsewhere in this joint proxy and consent solicitation statement/prospectus. See the sections titled “Where You Can Find More Information” and “Unaudited Pro Forma Condensed Combined Financial Statements” for additional information.

 

The following selected unaudited pro forma condensed combined balance sheet as of December 31, 2020 combines the historical audited consolidated balance sheet of Akers as of December 31, 2020 with the historical audited balance sheet of MYMD as of December 31, 2020, giving pro forma effect to the merger, the Supera Purchase and the Contribution Transaction as if they had consummated on December 31, 2020.

 

The following selected unaudited pro forma condensed combined statements of comprehensive loss for the year ended December 31, 2020 combine the historical audited statement of comprehensive loss of Akers for its fiscal year ended December 31, 2020 and the historical audited condensed statements of operations of MYMD for its fiscal year ended December 31, 2020, giving pro forma effect to the merger, the Supera Purchase and the Contribution Transaction as if such transactions had been completed as of January 1, 2020.

 

The selected unaudited pro forma condensed combined financial data are presented for illustrative purposes only and are not necessarily indicative of the actual or future financial position or results of operations that would have been realized if the proposed merger, the Supera Purchase or the Contribution Transaction had been completed as of the date indicated in the unaudited pro forma condensed combined financial statements or that will be realized upon the consummation of the proposed transactions.

 

Unaudited Pro Forma Condensed Combined Statements of Comprehensive Loss, Balance Sheet and Other Data:

 

Statement of Comprehensive Loss Data

 

   For the Year Ended December 31, 2020 
Total Revenue  $- 
Loss from Continuing Operations   (13,677,517)
Net Loss from Continuing Operations   (13,677,617)
Net Loss Per Share from Continuing Operations, basic and diluted  $(0.21)

 

Balance Sheet Data

 

   As of December 31, 2020 
Cash and Cash Equivalents  $17,266,239 
Marketable Securities  $16,718,452 
Working Capital(1)  $27,832,946 
Total Assets  $70,881,271 
Total Liabilities  $6,459,317 
Accumulated Deficit  $(74,681,118)
Total Stockholders’ Equity  $64,421,954 

 

(1) We define working capital as current assets less current liabilities.

 

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COMPARATIVE HISTORICAL AND UNAUDITED PRO FORMA PER SHARE DATA

 

The following unaudited pro forma per share information as of and for the year ended December 31, 2020 reflects the merger and related transactions and the Contribution Transaction as if they had occurred on January 1, 2020. The following unaudited pro forma per share information does not give effect to the issuance of the Milestone Shares or payment of Additional Consideration. The information in the table is based on, and should be read together with, the historical financial statements of Akers that appear elsewhere in this joint proxy and consent solicitation statement/prospectus, the unaudited pro forma condensed combined financial statements that appear elsewhere in this joint proxy and consent solicitation statement/prospectus, including the notes thereto, and the historical financial statements of MYMD that appear elsewhere in this joint proxy and consent solicitation statement/prospectus. See the sections titled “Where You Can Find More Information” and “Unaudited Pro Forma Condensed Combined Financial Statements.”

 

The book value per share data represents the total equity position of the company divided by the total number of issued and outstanding common shares on the balance sheet date.

 

The unaudited pro forma per share data is presented for illustrative purposes only and is not necessarily indicative of actual or future financial position or results of operations that would have been realized if the proposed merger had been completed as of the dates indicated or will be realized upon the completion of the proposed merger. Akers and MYMD have not declared or paid any cash dividends during the periods presented.

 

 

  

As of and for the

Year Ended

December 31, 2020

 
Akers     
Book value per share – historical  $1.97 
Basic and diluted loss per share from continuing operations – historical  $(1.72)
MYMD     
Book value per share - historical  $(0.07)
Basic and diluted loss per share - historical  $(0.25)
Pro Forma     
Book value per share – pro forma  $0.84 
Basic and diluted loss per share from continuing operations – pro forma  $(0.21)

 

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RISK FACTORS

 

You should carefully consider the risks described below in evaluating whether to vote for or consent to the proposals discussed herein. The risks and uncertainties described below are not the only ones Akers and MYMD face, and these factors should be considered in conjunction with general investment risks and other information included in this joint proxy and consent solicitation statement/prospectus, including the matters addressed in the section titled “CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS” beginning on page 109 of this joint proxy and consent solicitation statement/prospectus. You should read and consider the risks associated with the business of MYMD beginning on page 69 of this joint proxy and consent solicitation statement/prospectus as these risk factors will also affect the operations of the combined company going forward because, assuming that the Contribution Proposal is approved, the business of the combined company will be MYMD’s business. You should also read and consider the risk factors associated with Akers beginning on page 105 of this joint proxy and consent solicitation statement/prospectus because these risk factors may affect the operations and financial results of the combined company.

 

Risks Related to the Proposed Merger

 

The ongoing COVID-19 pandemic may pose risks and could harm business and results of operations for each of Akers, MYMD, and the combined company following the completion of the merger.

 

The global outbreak of COVID-19 has resulted in, and is likely to continue to result in, substantial disruptions to markets and economies around the world, including the United States.

 

Given the ongoing and dynamic nature of the circumstances, it is difficult to predict the full impact of the COVID-19 pandemic on businesses of Akers, MYMD, and the combined company following the completion of the merger, and there is no guarantee that efforts by Akers, MYMD, and the combined company following the completion of the merger to address the adverse impacts of the COVID-19 pandemic will be effective. The extent of such impact will depend on future developments, which are highly uncertain and cannot be predicted, including the duration of the pandemic, continued travel restrictions, social distancing requirements, and government mandates, among others.

 

COVID-19 poses a material risk to the business, financial condition and results of operations of both Akers and MYMD, and potentially could create risks for the combined company following the completion of the merger, including:

 

  potential delays or impacts on business operations, product candidate development efforts, healthcare systems or the global economy as a whole;
  effects on key employees, including operational management personnel and those charged with preparing, monitoring and evaluating the companies’ financial reporting and internal controls; and
  increasing or protracted volatility in the price of Akers common stock.

 

These factors, together or in combination with other events or occurrences not yet known or anticipated, could adversely affect the value of the merger consideration or could delay or prevent the completion of the merger and the related transactions. If Akers or MYMD is unable to recover from a business disruption on a timely basis, the merger and the combined company’s business and financial conditions and results of operations following the completion of the merger could be adversely affected. The merger may also be delayed and adversely affected by the COVID-19 pandemic and become more costly. Each of Akers, MYMD, and the combined company may also incur additional costs to remedy damages caused by such disruptions, which could adversely affect each of their financial condition and results of operations.

 

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There is no assurance when or if the merger will be completed. Any delay in completing the merger may substantially reduce the potential benefits that Akers and MYMD expect to obtain from the merger.

 

Completion of the merger is subject to the satisfaction or waiver of a number of conditions, as set forth in the Merger Agreement, including the approval by Akers’ stockholders, approval by Nasdaq of Akers’ application for the initial listing of Akers’ common stock to be issued in connection with the merger, and other customary closing conditions. There can be no assurance that Akers and MYMD will be able to satisfy the closing conditions or that closing conditions beyond their control will be satisfied or waived. For a discussion of the conditions to the completion of the merger, see the section titled “THE MERGER AGREEMENT — Conditions to the Closing of the Merger” beginning on page 171 of this joint proxy and consent solicitation statement/prospectus. If the conditions are not satisfied or waived, the merger may not occur or may not be completed within the expected timeframe, and Akers and MYMD each may materially and adversely lose some or all of the potential benefits that Akers and MYMD expect to achieve as a result of the merger and could result in additional transaction costs or other effects associated with uncertainty about the merger. In addition, pursuant to the Merger Agreement, Akers may extend the originally scheduled End Date (defined in the Merger Agreement as April 15, 2021) to a later date, but Akers will have to make additional loans to MYMD or purchase MYMD common stock for such extensions. Moreover, each of Akers and MYMD has incurred and expects to continue to incur significant expenses related to the merger, such as legal and accounting fees, some of which must be paid even if the merger is not completed.

 

Akers and MYMD can agree at any time to terminate the Merger Agreement, even if Akers’ stockholders and/or MYMD’s securityholders have already adopted the Merger Agreement and thereby approved the merger and the other transactions contemplated by the Merger Agreement. Akers and MYMD can also terminate the Merger Agreement under other specified circumstances.

 

In addition, if the Merger Agreement is terminated and Akers’ or MYMD’s board of directors determines to seek another business combination, it may not be able to find a third party willing to provide equivalent or more attractive consideration than the consideration to be provided by each party in the merger. In such circumstances, the Akers Board of Directors may elect to, among other things, divest all or a portion of Akers’ business, or take the steps necessary to liquidate all of Akers’ business and assets, and in either such case, the consideration that Akers receives may be less attractive than the consideration to be received by Akers pursuant to the Merger Agreement.

 

The issuance of shares of Akers common stock to MYMD stockholders in the merger will substantially dilute the voting power of current Akers stockholders. Having a minority share position will reduce the influence that current stockholders have on the management of Akers.

 

Pursuant to the terms of the Merger Agreement, at the effective time of the merger, Akers will issue approximately 58,821,708 shares of its common stock using the assumed Exchange Ratio of 0.7950 (which is subject to change depending on the net amount of cash Akers has and the number of outstanding securities of Akers and MYMD at the effective time of the merger), without giving effect to the proposed reverse stock split contemplated by the Reverse Stock Split Proposal, to MYMD stockholders as merger consideration. As a result, upon completion of the merger, the current Akers stockholders and holders of certain outstanding options and warrants to purchase shares of Akers common stock (excluding certain holders of warrants issued in connection the Akers Private Placement and holders of out-of-the money options and warrants) will hold approximately 19,503,756 pre-reverse stock split shares, which is currently expected to be approximately 68.8% of the fully diluted equity of the combined company as further described under “THE MERGER — General” in this joint proxy and consent solicitation statement/prospectus. Accordingly, the issuance of the shares of Akers common stock to MYMD stockholders in the merger will significantly reduce the ownership stake and relative voting power of each share of Akers common stock held by current Akers stockholders. Consequently, following the merger, the ability of Akers’ current stockholders to influence the management of Akers will be substantially reduced.

 

Moreover, under the terms of the Merger Agreement, Akers agreed to pay the Milestone Payments, payable in shares of Akers common stock to MYMD stockholders upon the achievement of certain market capitalization milestone events during the Milestone Period, up to the number of shares of Akers common stock issuable to the MYMD stockholders upon the closing of the merger. In the event that such milestone events are achieved, and Milestone Payments are made, Akers’ current stockholders will experience further reduction in relative voting power. For a discussion of the Milestone Payments pursuant to the Merger Agreement, see the section title “THE MERGER AGREEMENT — Milestone Payments” beginning on page 169 of this joint proxy and consent solicitation statement/prospectus.

 

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The issuance, or expected issuance, of Akers common stock in connection with the merger could decrease the market price of Akers common stock.

 

In connection with the merger and as part of the merger consideration, Akers expects to issue shares of Akers common stock to MYMD stockholders. The anticipated issuance of Akers common stock in the merger may result in fluctuations in the market price of Akers common stock, including a stock price decrease. In addition, issuance of the Milestone Shares, if any applicable milestone is achieved, and the perception in the market that the holders of a large number of shares of Akers common stock may intend to sell shares could reduce the market price of Akers common stock.

 

The intended benefits of the merger may not be realized.

 

The merger poses risks for Akers’ and MYMD’s ongoing operations, including, among others:

 

  that senior management’s attention may be diverted from the management of Akers’ and MYMD’s current operations and development of their product candidates;
  costs and expenses associated with any undisclosed or potential liabilities; and
  unforeseen difficulties may arise in integrating MYMD’s and Akers’ business in the combined company.

 

As a result of the foregoing, the combined company may be unable to realize the full strategic and financial benefits currently anticipated from the merger, and Akers or MYMD cannot assure you that the merger will be accretive to Akers or MYMD in the near term or at all. Furthermore, if Akers or MYMD fails to realize the intended benefits of the merger, the market price of the combined company’s common stock could decline to the extent that the market price reflects those benefits. Akers’ stockholders will have experienced substantial dilution of their ownership interests in Akers without receiving any commensurate benefit, or only receiving part of the commensurate benefit to the extent the combined company is able to realize only part of the strategic and financial benefits currently anticipated from the merger.

 

Because the lack of a public market for MYMD common stock makes it difficult to evaluate the fairness of the merger, MYMD stockholders may receive consideration in the merger that is greater than or less than the fair market value of MYMD common stock.

 

The outstanding common stock of MYMD is privately held and is not traded in any public market. The lack of a public market makes it extremely difficult to determine the fair market value of MYMD shares. Since the percentage of Akers’ common stock to be issued to MYMD stockholders was determined based on negotiations between the parties, it is possible that the value of the Akers common stock to be issued in connection with the merger will be greater than the fair market value of MYMD shares. Alternatively, it is possible that the value of the shares of Akers common stock to be issued in connection with the merger will be less than the fair market value of MYMD shares.

 

Directors and officers of Akers and MYMD may have interests in the merger that are different from, or in addition to, those of Akers stockholders and MYMD stockholders generally that may influence them to support or approve the merger.

 

The officers and directors of Akers and MYMD may have interests in the merger that are different from, or are in addition to, those of Akers stockholders and MYMD stockholders generally. Effective upon the closing of the merger, Chris Chapman, M.D., current President and Chief Medical Officer of MYMD, Adam Kaplin, M.D., Ph.D., current Chief Scientific Officer of MYMD, and Paul Rivard, current Executive Vice President of Operations and General Counsel of MYMD, are expected to be employed as executive officers by the combined company, and Christopher Schreiber, current President and Chief Executive Officer of Akers, is expected to serve as an executive officer of the Supera line of business; each will receive compensation and other consideration as described in more detail in the section titled “THE MERGER — The Lock-Up/Leak-Out Agreements” beginning on page 166 of this joint proxy and consent solicitation statement/prospectus. It is expected that four of the current directors of Akers, Messrs. Schreiber, Silverman, White and Schroeder, are to be appointed as directors of the combined company after the completion of the merger and will receive cash and equity compensation in consideration for such service as described in more detail in the section titled “MANAGEMENT OF THE COMBINED COMPANY” beginning on page 199 of this joint proxy and consent solicitation statement/prospectus. Each outstanding option to acquire shares of MYMD common stock held by executive officers and directors of MYMD will be converted into an option to acquire shares of Akers common stock. The outstanding unvested restricted stock units (“RSUs”) held by Akers’ current executive officers and directors will vest in connection with the merger. In addition, the directors and executive officers of Akers and MYMD also have certain rights to indemnification or to directors’ and officers’ liability insurance that will survive the completion of the merger. These interests may have influenced the directors and executive officers of Akers and MYMD to support or recommend the proposals presented to Akers and MYMD stockholders. See the sections titled “THE MERGER — Interests of Akers’ Directors and Executive Officers in the Merger” beginning on page 156 and “THE MERGER — Interests of MYMD’s Directors and Executive Officers in the Merger” beginning on page 158 of this joint proxy and consent solicitation statement/prospectus.

 

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If the merger is completed, MYMD executive officers and MYMD appointees to the combined company’s board of directors will have the ability to significantly influence the combined company’s management and business affairs, as well as matters submitted to the combined company’s board of directors or stockholders for approval, especially if they decide to act together with the current MYMD stockholders.

 

Upon completion of the merger, the former MYMD stockholders will own approximately 80% of the combined company on a fully diluted basis, excluding the effect of warrants issued in the Akers Private Placement and after adjustments based on Akers’ net cash at closing (which after giving effect to such exclusions and adjustments is expected to be approximately 68.8% of the fully diluted equity of the combined company). If the merger is completed, the combined company is expected to be led by MYMD executive officers. Furthermore, the combined company’s anticipated board of directors will consist of seven members, three of which will be appointed by MYMD pursuant to the terms of the Merger Agreement. As a result, such persons, if they choose to act together, will have the ability to significantly influence the combined company’s management and business affairs, as well as matters submitted to the combined company’s board of directors or stockholders for approval.

 

The announcement and pendency of the merger could have an adverse effect on Akers’ or MYMD’s business, financial condition, results of operations or business prospects.

 

The announcement and pendency of the merger could disrupt Akers’ and/or MYMD’s businesses in the following ways, among others:

 

  Akers’ or MYMD’s current and prospective employees could experience uncertainty about their future roles within the combined company, and this uncertainty might adversely affect Akers’ or MYMD’s ability to retain, recruit and motivate key personnel;
  the attention of Akers’ or MYMD’s management may be directed towards the completion of the merger and other transaction-related considerations and may be diverted from the day-to-day business operations of Akers or MYMD, as applicable, and matters related to the merger may require commitments of time and resources that could otherwise have been devoted to other opportunities that might have been beneficial to Akers or MYMD, as applicable;
  customers, prospective customers, suppliers, collaborators and other third parties with business relationships with Akers or MYMD may decide not to renew or may decide to seek to terminate, change or renegotiate their relationships with Akers or MYMD as a result of the merger, whether pursuant to the terms of their existing agreements with Akers or MYMD; and
  the market price of Akers’ common stock may decline to the extent that the current market price reflects a market assumption that the proposed merger will be completed.

 

Should they occur, any of these matters could adversely affect the businesses of, or harm the financial condition, results of operations or business prospects of, Akers or MYMD.

 

During the pendency of the merger, Akers or MYMD may not be able to enter into a business combination with another party and will be subject to contractual limitations on certain actions because of restrictions in the Merger Agreement.

 

Covenants in the Merger Agreement impede the ability of Akers or MYMD to make dispositions or acquisitions or complete other transactions that are not in the ordinary course of business pending completion of the merger, other than the Supera Purchase, potential spin-off of all or a portion of Akers’ assets prior to the consummation of the merger, and certain permitted financings as set forth in the Merger Agreement. As a result, if the merger is not completed, the parties may be at a disadvantage to their competitors. In addition, while the Merger Agreement is in effect and subject to limited exceptions, each party is prohibited from soliciting, initiating, encouraging or taking actions designed to facilitate any inquiries or the making of any proposal or offer that could lead to the entering into certain extraordinary transactions with any third party, such as a sale of assets, an acquisition, a tender offer, a merger or other business combination outside the ordinary course of business. These restrictions may prevent each of Akers and MYMD from pursuing otherwise attractive business opportunities or other capital structure alternatives and making other changes to their business or executing certain of their business strategies prior to the completion of the merger, which could be favorable to Akers stockholders or MYMD stockholders. See the section titled “THE MERGER AGREEMENT — No Solicitation” beginning on page 175 of this joint proxy and consent solicitation statement/prospectus.

 

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Certain provisions of the Merger Agreement may discourage third parties from submitting competing proposals, including proposals that may be superior to the arrangements contemplated by the Merger Agreement.

 

The terms of the Merger Agreement prohibit each of Akers and MYMD from soliciting competing proposals or cooperating with persons making unsolicited takeover proposals, except in limited circumstances if the Akers Board of Directors determines in good faith, after consultation with its independent financial advisor and outside counsel, that an unsolicited competing proposal constitutes, or would reasonably be expected to result in, a superior competing proposal and that failure to take such action would be reasonably likely to result in a breach of the fiduciary duties of the Akers Board of Directors. In the event that the Akers Board of Directors withdraws or modifies its recommendation for Proposal 1— Approval of the Share Issuance Proposal based on such superior competing proposal, MYMD may terminate the Merger Agreement. See “THE MERGER AGREEMENT Termination of the Merger Agreement.

 

The rights of MYMD stockholders who become Akers stockholders in the merger and Akers stockholders following the merger will be governed by the A&R Charter and the Akers Bylaws.

 

Upon consummation of the merger, outstanding shares of MYMD common stock will be converted into the right to receive shares of Akers common stock. MYMD stockholders who receive shares of Akers common stock in the merger will become Akers stockholders. As a result, MYMD stockholders who become stockholders in Akers will be governed by Akers’ organizational documents and bylaws, rather than being governed by MYMD’s organizational documents and bylaws. See the section titled “COMPARISON OF RIGHTS OF AKERS STOCKHOLDERS AND MYMD STOCKHOLDERS” beginning on page 280 of this joint proxy and consent solicitation statement/prospectus. Pursuant to the Merger Agreement, the Akers Charter will be amended and restated, subject to Akers stockholders’ approval of the A&R Charter Proposal, immediately prior to the effective time of the merger. See the section titled “COMPARISON OF RIGHTS OF AKERS STOCKHOLDERS AND MYMD STOCKHOLDERS” beginning on page 280 of this joint proxy and consent solicitation statement/prospectus.

 

The Exchange Ratio is not adjustable based on the market price of Akers common stock, so the merger consideration at the closing may have a greater or lesser value than at the time the Merger Agreement was signed.

 

The Merger Agreement has set the Exchange Ratio formula for the MYMD common stock, and the Exchange Ratio is only adjustable upward or downward to reflect Akers’ and MYMD’s equity capitalization as of immediately prior to the effective time of the merger and the excess cash Akers has at the effective time of the merger. Any changes in the market price of common stock before the completion of the merger will not affect the number of shares MYMD securityholders will be entitled to receive pursuant to the Merger Agreement. Therefore, if before the completion of the merger, the market price of Akers common stock declines from the market price on the date of the Merger Agreement, then MYMD securityholders could receive merger consideration with substantially lower value. Similarly, if before the completion of the merger, the market price of Akers common stock increases from the market price on the date of the Merger Agreement, then MYMD securityholders could receive merger consideration with substantially more value for their shares of MYMD common stock than the parties had negotiated for in the establishment of the Exchange Ratio. In addition, the Exchange Ratio does not reflect the potential issuance of the Milestone Shares upon the achievement of certain market capitalization milestone events. For a discussion of the Exchange Ratio and the Milestone Shares, see the section titled “THE MERGER AGREEMENT — Exchange Ratio” and “THE MERGER AGREEMENT — Milestone Payments” beginning on pages 169 and 170 of this joint proxy and consent solicitation statement/prospectus.

 

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If the merger does not qualify as a reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended, or is otherwise taxable to U.S. MYMD stockholders, then such holders may be required to pay U.S. federal income taxes.

 

For U.S. federal income tax purposes, the merger is intended to constitute a reorganization within the meaning of Section 368(a) of the Code. If the Internal Revenue Service (the “IRS”) or a court determines that the merger should not be treated as a reorganization, a holder of MYMD common stock would recognize taxable gain or loss upon the exchange of MYMD common stock for Akers common stock pursuant to the Merger Agreement.

 

Akers is expected to incur substantial expenses related to the merger with MYMD.

 

Akers has incurred, and expects to continue to incur, substantial expenses in connection with the merger, as well as operating as a public company. Akers will incur significant fees and expenses relating to legal, accounting, financial advisory and other transaction fees and costs associated with the merger. Actual transaction costs may substantially exceed Akers’ estimates and may have an adverse effect on the combined company’s financial condition and operating results.

 

Failure to complete the merger could negatively affect the value of Akers common stock and the future business and financial results of both Akers and MYMD.

 

If the merger is not completed, the ongoing businesses of Akers and MYMD could be adversely affected. Pursuant to the Contribution Agreement, even if the merger does not close, Akers is obligated to close the Contribution Transaction on the 90th day from the date of the Contribution and Assignment Agreement and, in addition to making a cash contribution, assign substantially all of its current business to Oravax in exchange for a percentage of ownership in Oravax.

 

Moreover, each of Akers and MYMD will be subject to a variety of risks associated with the failure to complete the merger, including without limitation the following:

 

  diversion of management focus and resources from operational matters and other strategic opportunities while working to implement the merger;
  reputational harm due to the adverse perception of any failure to successfully complete the merger; and
  having to pay certain costs relating to the merger, such as legal, accounting, financial advisory, filing and printing fees.

 

If the merger is not completed, the market price of Akers common stock would be materially affected and the business and financial results of both Akers (including the cessation of its operations) and MYMD.

 

The merger is expected to result in a limitation on the combined company’s ability to utilize its net operating loss carryforward.

 

Under Section 382 of the Code, use of Akers’ net operating loss carryforwards (“NOLs”) will be limited if Akers experiences a cumulative change in ownership of greater than 50% in a moving three-year period. At December 31, 2020, Akers had approximately $100,615,000 of operating loss carryforwards for federal and approximately $7,548,000 for New Jersey state tax purposes that may be applied against future taxable income. Akers will experience an ownership change as a result of the merger and therefore its ability to utilize its NOLs and certain credit carryforwards remaining at the effective time of the merger will be limited. The limitation will be determined by the fair market value of Akers’ common stock outstanding prior to the ownership change, multiplied by the applicable federal rate. It is expected that the merger will impose a limitation on Akers’ NOLs. Limitations imposed on Akers’ ability to utilize NOLs could cause U.S. federal and state income taxes to be paid earlier than would be paid if such limitations were not in effect and could cause such NOLs to expire unused, in each case reducing or eliminating the benefit of such NOLs.

 

The opinion received by the Akers Board of Directors from GVS has not been, and is not expected to be, updated to reflect changes in circumstances that may have occurred since the date of the opinion.

 

At a Akers Board of Directors meeting held on November 11, 2020, Akers’ financial advisor, GVS, rendered its opinion as to the fairness, from a financial point of view, of the contribution made and consideration received by the holders of Akers common stock pursuant to the Merger Agreement and rendered its oral opinion to Akers’ Board of Directors (which was subsequently confirmed in writing as of November 11, 2020) that, as of the date of such opinion and subject to the various assumptions made, procedures followed, matters considered and qualifications and limitations set forth in such opinion, the contribution made and consideration received by the holders of Akers common stock pursuant to the Merger Agreement was fair to the holders of Akers common stock from a financial point of view. On March 18, 2021, GVS provided a letter (the “Affirmation Letter”), reaffirming its opinion to the Akers Board of Directors previously rendered as to the fairness, from a financial point of view, of the consideration received by the holders of Akers common stock pursuant to the Merger Agreement, as modified per draft Amendment No. 1 to the Merger Agreement, dated March 16, 2021, based on the same qualifications, assumptions and methodologies as used in the original analysis with respect to the GVS Opinion. Such opinion was one of many factors considered by the Akers Board of Directors in approving the merger. The opinion does not speak as of the time the merger will be completed or any date other than the date of such opinion. Subsequent changes in the operation and prospects of Akers or MYMD, general market and economic conditions and other factors that may be beyond the control of Akers or MYMD, may significantly alter the value of Akers or MYMD or the prices of the shares of Akers common stock by the time the merger is to be completed. The opinion does not address the fairness of the merger consideration from a financial point of view to Akers at the time the merger is to be completed, or as of any other date other than the date of such opinion, and the Merger Agreement does not require that the opinion be updated, revised or reaffirmed prior to the closing of the merger to reflect any changes in circumstances between the date of the signing of the Merger Agreement and the completion of the merger as a condition to closing the merger. See the section titled “THE MERGER — Opinion of Akers’ Financial Advisor” beginning on page 148, Annex F and Annex M to this joint proxy and consent solicitation statement/prospectus.

 

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The merger may be completed even though material adverse changes may result from the announcement of the merger, industry-wide changes or other causes.

 

In general, either party can refuse to complete the merger if there is a material adverse effect (as defined in the Merger Agreement) affecting the other party between November 11, 2020, the date of the Merger Agreement, and the closing of the merger. However, some types of changes do not permit either party to refuse to complete the merger, even if such changes would have a material adverse effect on Akers or MYMD, as the case may be:

 

  changes or events affecting the industries or industry sectors in which the parties operate generally;
  changes or events generally affecting the U.S. or global economy or capital markets as a whole;
  with respect to Akers, changes in the trading price or trading volume of Akers’ common stock;
  hurricane, flood, tornado, earthquake or other natural disaster, epidemic, plague, pandemic (including the COVID-19 pandemic) or other public health event or any other force majeure event;
 

changes in GAAP or other applicable law or legal requirement;

  changes caused by the announcement or pendency of the merger; or
  changes caused by any action taken, or the failure to take any action that is expressly required by the Merger Agreement.

 

If adverse changes occur but Akers and MYMD must still complete the merger, the market price of Akers common stock may suffer. For a more complete discussion of what constitutes a material adverse effect on Akers or MYMD under the Merger Agreement, see the section titled “THE MERGER AGREEMENT — Representations and Warranties” beginning on page 174 of this joint proxy and consent solicitation statement/prospectus.

 

Akers and MYMD may become involved in additional securities litigation or stockholder derivative litigation in connection with the merger, and this could divert the attention of Akers and MYMD management and harm the combined company’s business, and insurance coverage may not be sufficient to cover all related costs and damages.

 

Securities litigation or stockholder derivative litigation frequently follows the announcement of certain significant business transactions, such as the sale of a business division or announcement of a business combination transaction. Between January 22, 2021 and March 18, 2021, nine alleged Akers stockholders filed separate actions in the state and federal courts of New York, New Jersey, and Pennsylvania against Akers and the members of the Akers Board of Directors, respectively captioned as follows: (i) Douglas McClain v. Akers Biosciences, Inc., et al., No. 650497/2021 (Sup. Ct., N.Y. Cty.); (ii) Owen Murphy v. Akers Biosciences, Inc. et al, No. 650545/2021 (Sup. Ct., N.Y. Cty); (iii) Sue Gee Chang v. Akers Biosciences, Inc., et al., No. 1:21-cv-01110 (S.D.N.Y.); (iv) Danny Lui v. Akers Biosciences, Inc., et al., No. GLO-C-000006-21 (N.J. Super. Ct., Ch. Div.); (v) Alan Misenheimer v. Akers Biosciences, Inc., et al., No. 1:21-cv-02310 (D.N.J.); (vi) Robert Wilhelm v. Akers Biosciences, Inc., et al., No. 1:21-cv-04616 (D.N.J.); (vii) Adam Franchi v. Akers Biosciences, Inc., et al., No. 1:21-cv-04696 (D.N.J.); (viii) Cody McBeath v. Akers Biosciences, Inc., et al., No. 2:21-cv-01151 (E.D. Pa.); and (ix) Ray Craven v. Akers Biosciences, Inc., et al., No. 1:21-cv-05762 (D.N.J.) (collectively, the “MYMD Merger Complaints”). The Lui action is styled as putative class action brought on behalf of the plaintiff and other similarly situated stockholders, while the other eight actions are brought solely on behalf of the individual stockholders. The MYMD Merger Complaints generally assert that Akers and the Akers Board of Directors failed to disclose allegedly material information in the preliminary joint proxy and consent solicitation/prospectus filed on January 15, 2021 and seek an order enjoining or unwinding the consummation of the Merger Agreement and awarding damages. The defendants believe that the claims asserted in the MYMD Merger Complaints are without merit and intend to appropriately defend themselves against them. Accordingly, Akers does not expect that these claims will have a material adverse effect on Akers or MYMD. Akers and MYMD may become involved in more of this type of litigation in connection with the merger, and the combined company may become involved in this type of litigation in the future. Litigation often is expensive and diverts management’s attention and resources, which could adversely affect the business of Akers, MYMD and the combined company.

 

Risks Related to the Reverse Stock Split

 

The reverse stock split may not increase the combined company’s stock price over the long term.

 

If the Reverse Stock Split Proposal is approved, the combined company anticipates effecting a reverse stock split in order to cause its stock price to be at least $5.00 with a ratio between 1-for-1.5 and 1-for-20 immediately following the merger. While it is expected that the reduction in the number of outstanding shares of common stock will proportionally increase the market price of the combined company’s common stock upon effectiveness of the reverse stock split, it cannot be assured that the reverse stock split will result in any sustained proportionate increase in the market price of the combined company’s common stock, which is dependent upon many factors, including the business and financial performance of the combined company, general market conditions, and prospects for future success, which are unrelated to the number of shares of the combined company’s common stock outstanding. Thus, while the stock price of the combined company might meet the initial listing requirements for Nasdaq initially, it cannot be assured that it will continue to do so.

 

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The reverse stock split would have the effect of increasing the amount of common stock that the combined company is authorized to issue without further approval by the combined company’s stockholders.

 

As a result of the reverse stock split, and after giving effect to the merger, the combined company expects that it will have between approximately 3,813,977 shares and 50,853,000 shares of common stock outstanding, compared to approximately 76,279,500 shares of Akers common stock outstanding as of March 12, 2021, based on the assumed Exchange Ratio of 0.7950. The proposed A&R Charter for the combined company is anticipated to authorize the combined company to issue 500,000,000 shares of common stock and does not anticipate reducing this amount in connection with the reverse stock split. As a result, it is anticipated that the reverse stock split will give the combined company the ability to issue between approximately 449,147,000 and 496,186,023 additional shares of common stock, including shares that may be issued pursuant to awards that have been granted and outstanding warrants. Except in certain instances, as required by law or by the rules of the securities exchange that lists the combined company’s common stock, these additional shares may be issued by the combined company without further vote of the combined company’s stockholders. If the combined company’s board of directors chooses to issue additional shares of the combined company’s common stock, such issuance could have a dilutive effect on the equity, earnings and voting interests of the combined company’s stockholders.

 

The reverse stock split may decrease the liquidity of Akers’ common stock.

 

Although the Akers Board of Directors believes that the anticipated increase in the market price of Akers’ common stock could encourage interest in its common stock and possibly promote greater liquidity for its stockholders, such liquidity could also be adversely affected by the reduced number of shares outstanding after the reverse stock split. The reduction in the number of outstanding shares may lead to reduced trading and a smaller number of market makers for Akers’ common stock.

 

The reverse stock split may lead to a decrease in overall market capitalization of the combined company.

 

Should the market price of Akers’ common stock decline after the reverse stock split, the percentage decline may be greater, due to the smaller number of shares outstanding, than it would have been prior to the reverse stock split. A reverse stock split is often viewed negatively by the market and, consequently, can lead to a decrease in the overall market capitalization of the combined company. If the per share market price does not increase in proportion to the reverse stock split ratio, then the value of the combined company, as measured by its stock capitalization, will be reduced. In some cases, the per-share stock price of companies that have effected reverse stock splits subsequently declined back to pre-reverse split levels and, accordingly, it cannot be assured that the total market value of Akers’ common stock will remain the same after the reverse stock split is effected, or that the reverse stock split will not have an adverse effect on Akers’ stock price due to the reduced number of shares outstanding after the reverse stock split.

 

Risks Related to the Combined Company Following the Merger

 

Akers stockholders and MYMD stockholders may not realize a benefit from the merger commensurate with the ownership dilution they will experience in connection with the merger.

 

If the combined organization is unable to realize the full strategic and financial benefits currently anticipated from the merger, Akers stockholders and MYMD stockholders will have experienced substantial dilution of their ownership interests in their respective companies without receiving any commensurate benefit, or only receiving part of the commensurate benefit to the extent the combined organization is able to realize only part of the strategic and financial benefits currently anticipated from the merger. Furthermore, if the combined company fails to realize the intended benefits of the merger, the market price of Akers common stock could decline to the extent that the market price reflects those benefits.

 

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The market price of the combined company’s common stock after the merger may be subject to significant fluctuations and volatility, and the stockholders of the company may be unable to resell their shares at a profit and may incur losses.

 

There has not been a public market for the combined company’s common stock. The market price of the combined company’s common stock could be subject to significant fluctuation following the merger. The current business of Akers differs from that of MYMD in important respects and, accordingly, the results of operations of the combined company and the market price of the combined company’s common stock following the merger may be affected by factors different from those currently affecting the results of operations of Akers. Market prices for securities of life sciences and biopharmaceutical companies in particular have historically been particularly volatile and have shown extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies. Broad market and industry factors, as well as general economic, political and market conditions such as recessions or interest rate changes, may seriously affect the market price of the combined company’s common stock, regardless of the actual operating performance of the combined company. Some of the factors that may cause the market price of the combined company’s common stock to fluctuate include:

 

  investors reacting negatively to the effect on the combined company’s business and prospects from the merger;
  the announcement of new products, new developments, services or technological innovations by the combined company or the combined company’s competitors;
  actual or anticipated quarterly increases or decreases in revenue, gross margin or earnings, and changes in the combined company’s business, operations or prospects;
  announcements relating to strategic relationships, mergers, acquisitions, partnerships, collaborations, joint ventures, capital commitments, or other events by the combined company or the combined company’s competitors;
  conditions or trends in the life sciences and biopharmaceutical industries;
  changes in the economic performance or market valuations of other life sciences and biopharmaceutical companies;
  general market conditions or domestic or international macroeconomic and geopolitical factors unrelated to the combined company’s performance or financial condition;
  sale of the combined company’s common stock by stockholders, including executives and directors;
  volatility and limitations in trading volumes of the combined company’s common stock;
  volatility in the market prices and trading volumes of the life sciences and biopharmaceutical stocks;
  the combined company’s ability to finance its business;
  ability to secure resources and the necessary personnel to pursue the plans of the combined company;
  failure to meet external expectations or management guidance;
  changes in the combined company’s capital structure or dividend policy, future issuances of securities, sales or distributions of large blocks of common stock by stockholders;
  the combined company’s cash position;
  announcements and events surrounding financing efforts, including debt and equity securities;
  analyst research reports, recommendations and changes in recommendations, price targets, and withdrawals of coverage;
  departures and additions of key personnel;
  disputes and litigation related to intellectual properties, proprietary rights, and contractual obligations;
  investigations by regulators into the operations of the combined company or those of the combined company’s competitors;
  changes in applicable laws, rules, regulations, or accounting practices and other dynamics; and
  other events or factors, many of which may be out of the combined company’s control.

 

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In the past, following periods of volatility in the overall market and the market prices of particular companies’ securities, securities class action litigation has often been instituted against these companies. Litigation of this type, if instituted against the combined company, could result in substantial costs and a diversion of management’s attention and resources of the combined company. Any adverse determination in any such litigation or any amounts paid to settle any such actual or threatened litigation could require that the combined company make significant payments.

 

Moreover, the COVID-19 pandemic has resulted in significant financial market volatility and uncertainty in recent months. A continuation or worsening of the levels of market disruption and volatility seen in the recent past could have an adverse effect on the combined company’s ability to access capital, on the combined company’s business, results of operations and financial condition, and on the market price of the combined company’s common stock.

 

If the merger is consummated, the business operations, strategies and focus of the combined company will fundamentally change, and these changes may not result in an improvement in the value of its common stock.

 

Pending the consummation of the merger, and subject to the approval of the Contribution Proposal, it is currently anticipated that the combined company would focus its resources on executing MYMD’s current business plan. Accordingly, substantially simultaneously following the merger, the combined company has agreed to sell Akers’ legacy assets and, as such, the stockholders of Akers and MYMD will not participate in the future prospects of such Akers legacy assets.

 

Following the merger, it is expected that the combined company’s primary products will be MYMD’s product candidates: MyMD-1, a clinical-stage immunometabolic regulator and Supera-1R, a pre-clinical stage patented synthetic cannabidiol derivative. Consequently, if the merger is consummated, an investment in Akers’ common stock will primarily represent an investment in the business operations, strategies and focus of MYMD. MYMD expects to incur losses as it develops its product candidates, and MYMD’s product candidates, may never get approved by the U.S. Food and Drug Administration (“FDA”) or even if approved for marketing, may not be profitable. The failure to successfully develop product candidates will significantly diminish the anticipated benefits of the merger and have a material adverse effect on the business of the combined company. There is no assurance that the combined company’s business operations, strategies or focus will be successful following the merger, and the merger could depress the value of the combined company’s common stock.

 

The unaudited pro forma condensed combined financial statements are presented for illustrative purposes only, and future results of the combined company may differ materially from the unaudited pro forma financial statements presented in this joint proxy and consent solicitation statement/prospectus.

 

The unaudited pro forma condensed combined financial statements contained in this joint proxy and consent solicitation statement/prospectus are presented for illustrative purposes only and may not be an indication of the combined company’s financial condition or results of operations following the completion of the merger for several reasons. The unaudited pro forma condensed combined financial statements have been derived from the historical financial statements of Akers and MYMD and adjustments and assumptions have been made regarding the combined company after giving effect to the Supera Purchase, merger and related transactions. The information upon which these adjustments and assumptions have been made is preliminary, and these kinds of adjustments and assumptions are difficult to make with accuracy. Moreover, the unaudited pro forma condensed combined financial statements do not reflect all costs that are expected to be incurred by the combined company in connection with the merger. As a result, the actual financial condition and results of operations of the combined company following the completion of the merger may not be consistent with, or evident from, these unaudited pro forma condensed combined financial statements. The assumptions used in preparing the pro forma financial information may not prove to be accurate, and other factors may affect the combined company’s financial condition or results of operations following the merger. Any decline or potential decline in the combined company’s financial condition or results of operations may cause significant variations in the market price of Akers common stock.