Under the terms of the agreement, all outstanding shares of Cornerstone’s common stock will be converted into and exchanged for shares of Critical Therapeutics’s common stock and all outstanding Cornerstone options and warrants will be assumed by Critical Therapeutics and become options and warrants to acquire Critical Therapeutics’s common stock. The merger agreement provides for Critical Therapeutics to issue in the merger to Cornerstone stockholders, and assume Cornerstone options and warrants that will represent an aggregate of 101.5 million shares of Critical Therapeutics’s common stock, subject to adjustment as a result of a reverse stock split to occur in connection with the closing of the merger.
Following the transaction, Cornerstone’s stockholders will own approximately 70%, and Critical Therapeutics’s stockholders will own approximately 30%, of the combined company’s common stock, after giving effect to shares issuable pursuant to outstanding Cornerstone options and warrants, but without giving effect to any shares issuable pursuant to outstanding Critical Therapeutics options and warrants.
The combined company’s clinical and preclinical pipeline will include a number of product candidates. The combined company will implement a strategic review of its product development pipeline and is expected to pursue line extensions of Spectracef as part of the life cycle plan for that product with any new products targeted for launch during the two years following the closing of the transaction.