DDDD.L Regulatory News (DDDD)

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4D PHARMA PLC ANNOUNCES INTENTION TO MERGE WITH LONGEVITY ACQUISITION CORPORATION, A SPECIAL PURPOSE ACQUISITION COMPANY, AND ITS INTENTION TO SEEK A NASDAQ LISTING

Leeds, UK - 22 October 2020, - 4D pharma plc (AIM: DDDD) ("4D" or the "Company"), a pharmaceutical company leading the development of Live Biotherapeutic Products ("LBPs"), and Longevity Acquisition Corporation (NASDAQ: LOAC) ("Longevity"), a NASDAQ-listed Special Purpose Acquisition Company ("SPAC"), today announce the proposed combination of 4D and Longevity (the "Merger"). Upon Completion of the Merger, 4D shall be the surviving entity and the shareholders of Longevity will receive American Depositary Shares representing 4D Ordinary Shares.

Highlights

· The Merger is priced at an agreed valuation of £1.10 per 4D Ordinary Share, representing an 18 per cent. premium to the £0.932 Closing Price on the Last Practicable Date.

· The Enlarged Group expects to launch a new American Depositary Receipt programme and will apply to admit its American Depositary Shares for trading on NASDAQ (the " NASDAQ Listing"), under the ticker symbol 'LBPS'.

· As a result of the Merger, the Enlarged Group will benefit from the US$14.6 million cash held by Longevity and backstopped by supportive investors, extending the current operational runway into early Q3 2021.

· Immediately following the Merger, 4D Shareholders will own approximately 86.9 per cent. of the issued share capital of the Enlarged Group (based on the current issued share capital of 4D and Longevity).

· Immediately following the Merger, Longevity Shareholders will own approximately 13.1 per cent. of the issued share capital of the Enlarged Group (based on the current issued share capital of 4D and Longevity).

· 4D will also maintain its current listing on AIM, under the ticker symbol 'DDDD'.

The Merger is expected to be completed and the NASDAQ Listing is currently expected to become effective in early 2021, subject to approval of 4D Shareholders and Longevity Shareholders, and the SEC review process, of which further details are set out below. Further announcements will be made by the Company in due course.

"Despite the tremendous operational and economic challenges in 2020 created by the global pandemic, 4D has made significant strides on a number of fronts. This includes 4D presenting clinical data for Live Biotherapeutics for the treatment of cancer in combination with MSD's Keytruda®, as well as positive Phase II results for the first drug candidate able to treat both IBS-C and IBS-D. In addition, earlier in 2020 4D was able to quickly instigate a Phase II clinical trial in COVID-19 based on our detailed understanding of our asthma program," commented Duncan Peyton, Chief Executive Officer of 4D. "We expect that a NASDAQ Listing will allow 4D to capitalise on increased interest from US healthcare investors in recent years and provide access to a much larger pool of specialist capital, thereby increasing our global profile and exposure. NASDAQ is an attractive market for growing, innovative biotech companies. The Merger will accelerate and de-risk 4D's admission to NASDAQ, while providing immediate access to additional funds to support our pipeline."

Commenting on the Merger, Matthew Chen, Chief Executive Officer of Longevity said: "We are truly excited about the Merger with 4D. Our team reviewed many opportunities in a variety of industries, and determined that the Transaction with 4D would provide the greatest value to our shareholders. 4D is developing promising biotherapeutics to address unmet medical needs. We are impressed by 4D management team's track record in drug development and partnership building. We are very excited about the future prospects of the Enlarged Group."

Enquiries:

Pinsent Masons LLP is acting as legal adviser to 4D pharma plc as to English Law and Wilson Sonsini Goodrich & Rosati, Professional Corporation, is acting as legal adviser to 4D pharma plc as to US law. Addleshaw Goddard LLP is acting as legal adviser to Longevity Acquisition Corporation as to English law and Hunter Taubmann Fischer & Li LLC is acting as legal adviser to Longevity Acquisition Corporation as to US law.

Background to and reasons for the Transaction

Throughout 2020 there has been a significant increase in interest in 4D on the part of overseas investors, particularly those based in the US. As a result of this increased US interest, in July 2020 4D announced that it was investigating other capital market opportunities, including options for a potential US listing. The Merger with Longevity provides the opportunity for 4D to obtain a listing on NASDAQ.

The 4D Directors believe that a NASDAQ Listing will give 4D an opportunity to expand its investor base, attract substantial capital investment and enhance its reputation globally. The NASDAQ Listing will also enable 4D to access funds from specialist healthcare investors that might otherwise be unavailable to the Company as a result of its current listing on AIM. NASDAQ is well known as a particularly supportive environment for rapidly growing biotech businesses such as 4D. The 4D Directors believe that such investors have an investment appetite more suited to a rapidly growing company in the biotechnology sector. As such, the 4D Directors believe that the value of the Company's intellectual property and drug discovery and development activities will be better realised on the US markets due to the larger pool of specialist investors being able to recognise 4D's position as the leader in its field.

The 4D Directors have explored a number of options to access the US capital markets, including a direct listing onto NASDAQ and a reverse merger. The 4D Directors concluded that the preferred avenue to accessing the US capital markets was a merger with a special purpose acquisition company, or SPAC.

A comprehensive analysis of available SPACs has been conducted by the 4D Directors, who sought to identify a SPAC with sufficient capital to extend meaningfully the Company's cash runway without excessively diluting the holdings of 4D's Shareholders. Longevity was identified as the preferred SPAC during this process.

A backstop financing facility has been put in place such that the US$14.6 million cash reserves held by Longevity as at the Last Practicable Date, will be guaranteed to be held by Longevity upon Completion. These funds (less existing indebtedness in Longevity repayable on Completion and the costs associated with the Transaction) will thus be available to the Enlarged Group as new capital following Completion, giving the Enlarged Group an operational runway into early Q3 2021.

It is anticipated that, as a dual listed entity on both AIM and NASDAQ, the Enlarged Group will benefit from a higher profile and greater exposure to investors, potential partners, analysts and industry media.

The Longevity Board and the largest shareholder in Longevity, Whale Management Corporation (the SPAC sponsor which currently holds approximately 48 per cent. of Longevity 's issued share capital), are supportive of the Transaction. In discussions between 4D and Longevity management, the Longevity Board has expressed its support for 4D's operations and potential for near-term and long-term value creation as a leader in its field. 

Information on Longevity

Longevity Acquisition Corporation was formed in March 2018 and undertook an initial public offering ("IPO") on NASDAQ in August 2018. Longevity was formed as a SPAC for the purpose of acquiring or merging with one or more businesses or entities. As at the Last Practicable Date, Longevity had not yet commenced any operations and all activity relates to its formation, its IPO and identifying a target company for a an acquisition or merger.

As at the Last Practicable Date, Longevity held cash to the value of US$14.6 million.

Principal Terms of the Merger

On 22 October 2020, 4D and Longevity entered into a merger agreement and plan of merger (the "Merger Agreement"). On Completion, each issued Longevity Share held immediately prior to the Merger becoming effective will be converted into the right to receive 4D ADSs pursuant to the Exchange Ratio.

On Completion, 4D is expected to issue approximately 19,783,827 new 4D Ordinary Shares (the "Consideration Shares") which will be deposited with a depositary in order to issue 4D ADSs to current Longevity Shareholders (based on a ratio of 1 4D ADS for every 8 Consideration Shares issued). The Longevity Shareholders are expected to own approximately 13.1 per cent. of the issued share capital of 4D (based on the current issued share capital of 4D and Longevity) immediately following the Merger. Based on a price of £1.10 per 4D Ordinary Share, the 4D Ordinary Shares underlying the 4D ADSs to be issued in exchange for each Longevity Share in the Merger represent an aggregate value of approximately US$26.1 million.

In addition, the 4,320,000 outstanding warrants issued by Longevity to the Longevity Shareholders will be converted into warrants to receive 4D Ordinary Shares in the form of 4D ADSs based on the Exchange Ratio. If exercised, these warrants would represent an additional US$23 million of capital to the Enlarged Group.

Application will be made to the London Stock Exchange for the Consideration Shares to be admitted to trading on AIM. The Consideration Shares will be issued to Longevity Shareholders by means of the issue of a proportionate number of 4D ADSs expected to be admitted to trading on the NASDAQ.

Backstop Arrangements and Related Party Transactions

The current Longevity Shareholders have the right to redeem their shareholding in Longevity, even if the requisite majority of Longevity Shareholders approve the Merger. US$14.6 million is currently held in a trust account by Longevity to fund redemptions. Any redemptions by Longevity Shareholders would reduce the capital available to the Enlarged Group. Backstop agreements have therefore been executed by Longevity, the Company and Whale with certain investors, including Duncan Peyton and Alex Stevenson, (together the "Backstop Investors").

The Backstop Investors have committed to subscribe for Longevity Shares prior to Completion so as to raise up to US$14.6 million in the event of redemptions by Longevity Shareholders. To secure the Backstop Arrangements, Longevity has agreed to allot 700,000 Longevity Shares to the Backstop Investors, Whale has agreed to transfer 200,000 Longevity Shares to the Backstop Investors, and the Company has agreed to allot up to 7,530,000 4D Ordinary Shares to the Backstop Investors if and to the extent outstanding warrants issued by Longevity are exercised.

The Backstop Arrangements also provide that, subject to certain conditions, 4D may be required to file, within thirty days after Completion, a registration statement under the US Securities Act registering the resale of the 4D Ordinary Shares received by the Backstop Investors pursuant to the Merger and the Backstop Arrangements.

The Backstop Investors have agreed to loan Longevity US$1.86 million, the proceeds of which will be used to repay Whale for loans previously made by Whale to Longevity to fund its launch costs. On Completion, the Enlarged Group will repay this sum to the Backstop Investors.

Related Party Transactions

The participation by Duncan Peyton (in the amount of US$1,075,862) and Alex Stevenson (in the amount of US$827,856) in the Backstop Arrangements constitutes a related party transaction for the purposes of the AIM Rules. In addition, Steve Oliveira and connected parties, a substantial shareholder of the Company (as defined by the AIM Rules) is participating in the Backstop Arrangements in the amount of US$5 million (in aggregate). The participation by Steve Oliveira and connected parties in the Backstop Arrangements also constitutes a related party transaction for the purposes of the AIM Rules.

The 4D Independent Directors, having consulted with the Company's nominated adviser, N+1 Singer, consider that the terms of the related party transactions are fair and reasonable insofar as Shareholders are concerned. In providing their advice to the 4D Independent Directors, N+1 Singer have taken into account the commercial assessments of the 4D Independent Directors.

Lock-up Agreements

Duncan Peyton and Alex Stevenson, being the Chief Executive Officer and Chief Scientific Officer respectively, will enter into Lock-up Agreements at Completion. Under the terms of the Lock-up Agreement, each of Mr Peyton and Dr Stevenson will agree that, subject to certain limited exceptions, he will not sell any Consideration Shares due to them under the terms of the Merger for a period of twelve months.

Strategic plans for the Enlarged Group

There is no current intention to change any of the operations of 4D as a result of the Transaction, which will continue to operate as they currently do.

4D is headquartered in Leeds, England, where senior management, the clinical operations team, corporate development, regulatory and financial business functions are also based. 4D will be the holding company of the Enlarged Group. Candidate discovery and pre-clinical development operations are conducted at a facility in Aberdeen, Scotland. The bioinformatics team is based in Cork, Republic of Ireland. In support of its pre-clinical and clinical development activities, 4D will continue to operate CMC development and manufacturing at its facility in Leon, Spain.

Following Completion, 4D intends to continue the clinical development of its lead assets - MRx0518 in the treatment of cancer, MRx-4DP0004 in the treatment of asthma, COVID-19 and other inflammatory respiratory conditions, Blautix® in the treatment of IBS, and Thetanix® in the treatment of IBD. 4D's pre-clinical development activities will also continue with a view to progressing additional Live Biotherapeutic drug candidates into and through clinical development, including but not limited to 4D's pioneering work in the field of neurodegeneration. 4D's research collaboration with MSD to develop novel vaccines will continue as detailed in previous announcements by the Company.

Although it is not ruled out going forward, it is currently not intended that 4D will move any operations to the US in the near-term. However, a US subsidiary has recently been established to enable recruitment of key US-based staff going forward, thus permitting additional US-facing business functions to be established if and when required.

4D Board

Following Completion, existing 4D Directors will continue to serve in their current roles.

Timetable and Conditions

The Transaction will be subject to, inter alia:

· approval by Longevity Shareholders of the extension to the Business Combination Deadline;

· approval by Longevity Shareholders of the Merger;

· approval of 4D Shareholders of the resolutions required to effect the Transaction;

· the listing of the 4D ADSs on NASDAQ; and

· customary conditions concerning the accuracy of the representations and warranties of the parties, except as would not have a material adverse effect, the compliance of each party with its covenants in all material respects, and the absence of a material adverse effect on either party.

A Circular containing further information about the Merger and 4D General Meeting, together with the associated form of proxy to vote at the 4D General Meeting, will be posted to 4D Shareholders following declaration of effectiveness by the SEC of the Form F-4 to be filed by 4D. The 4D General Meeting and the Longevity Meeting are expected to be held as soon as practicable thereafter.

4D expects to publish and file with the SEC a Registration Statement on Form F-4, which will include a proxy statement of Longevity that also constitutes a prospectus of 4D under SEC rules.

Longevity intends to hold a shareholder meeting on or around 20 November 2020 in order to extend its Business Combination Deadline to 29 May 2021, thereby allowing sufficient time for all of the Conditions to be satisfied and for the Transaction to complete. 4D has received an irrevocable undertaking from Whale to vote in favour of the resolutions to effect the Transaction to be proposed at the general meeting of Longevity Shareholders in respect of holdings totalling, in aggregate, 1,250,000 Longevity Shares, representing 48 per cent. of Longevity 's outstanding shares of common stock.

The Transaction is currently expected to become effective in early 2021, subject to the approval of 4D Shareholders, Longevity Shareholders and the SEC review process.

Admission to NASDAQ

4D intends to apply to list its 4D ADSs on NASDAQ, to be effective at Completion.

Important Notice 

N+1 Singer, which is authorised and regulated by the FCA in the United Kingdom, is acting as financial adviser exclusively for 4D and no one else in connection with the matters set out in this announcement and will not be acting for any other person or otherwise be responsible to any person other than 4D for providing the protections afforded to clients of N+1 Singer or for advising any other person in respect of the matters set out in this announcement, or any transaction, matter or arrangement referred to in this announcement. Neither N+1 Singer nor any of its affiliates (nor their respective directors, officers, employees or agents) owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of N+1 Singer in connection with this announcement, any statement contained herein, or otherwise. N+1 Singer has given, and not withdrawn, its consent to the inclusion of its advice in this announcement in the form and context in which it appears.

This announcement is for information purposes only and is not intended to, and does not, constitute or form part of any offer or invitation to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Merger or otherwise.

This announcement does not constitute a prospectus or prospectus equivalent document.

This announcement has been issued by, and is the sole responsibility of, the Company. The information contained in this announcement is for background purposes only and does not purport to be full or complete. The information in this announcement is subject to change without notice. Subject to the AIM Rules, the UK Disclosure Guidance and Transparency Rules and MAR, the issue of this announcement shall not, under any circumstances, create any implication that there has been no change in the affairs of the Company or Longevity since the date of this announcement or that the information in this announcement is correct as at any time subsequent to the date of this announcement.

The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession this announcement, or other information referred to herein, comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. 

No statement in this announcement is intended to be a profit forecast, and no statement in this announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.

Overseas Shareholders

4D Shareholders who are not resident in or citizens of the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are located or of which they are citizens and as such should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdictions. In particular, the ability of persons who are not resident in the United Kingdom to vote their 4D Ordinary Shares at the 4D General Meeting, or to appoint another person as proxy to vote at the 4D General Meeting on their behalf, may be affected by the laws of the relevant jurisdictions in which they are located. Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the Company, Longevity and all other persons involved in the Merger disclaim any responsibility or liability for the violation of such restrictions by any person. Further details in relation to Overseas Shareholders will be contained in the Circular.

Copies of this announcement and any formal documentation relating to the Merger are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from any Restricted Jurisdiction and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send it in or into or from any Restricted Jurisdiction.

Notice to US investors

This document is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from 4D that will contain detailed information about 4D and its management, and the Merger, as well as financial statements. 4D intends to file registration statements in the United States with respect to the issuance of 4D ADSs in the Merger, the resale of certain 4D ADSs representing outstanding 4D Ordinary Shares and the issuance of 4D Ordinary Shares upon exercise of certain outstanding warrants following the Merger.

No Offer or Solicitation

This communication is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities or the solicitation of any vote in any jurisdiction pursuant to the proposed transactions or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction, in each case in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the US Securities Act and applicable European or UK, as appropriate, regulations. Subject to certain exceptions to be approved by the relevant regulators or certain facts to be ascertained, the public offer will not be made directly or indirectly, in or into any jurisdiction where to do so would constitute a violation of the laws of such jurisdiction, or by use of the mails or by any means or instrumentality (including without limitation, facsimile transmission, telephone and the internet) of interstate or foreign commerce, or any facility of a national securities exchange, of any such jurisdiction.

Forward looking statements

This announcement (including information incorporated by reference in this announcement), oral statements made regarding the Transaction, and other information published by Longevity and 4D contain statements which are, or may be deemed to be, "forward-looking statements". Forward-looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of Longevity and 4D about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements.

The forward-looking statements contained in this announcement include statements relating to the expected effects of the Transaction on Longevity and 4D (including their future prospects, developments and strategies), the expected timing and scope of the Merger and other statements other than historical facts. Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as "plans", "expects" or "does not expect", "is expected", "is subject to", "budget", "projects", "strategy", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Although Longevity and 4D believe that the expectations reflected in such forward-looking statements are reasonable, Longevity and 4D can give no assurance that such expectations will prove to be correct. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements.

These factors include, but are not limited to: the ability to obtain requisite regulatory and shareholder approvals and the satisfaction of other Conditions on the proposed terms and schedule; future market conditions, changes in general economic and business conditions, the behaviour of other market participants, the anticipated benefits from the proposed transaction not being realised as a result of changes in general economic and market conditions in the countries in which Longevity and 4D operate, weak, volatile or illiquid capital and/or credit markets, changes in tax rates, interest rate and currency value fluctuations, the degree of competition in the geographic and business areas in which Longevity and 4D operate and changes in laws or in supervisory expectations or requirements. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements. Such forward-looking statements should therefore be construed in the light of such factors. Neither Longevity nor 4D, nor any of their respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this announcement will actually occur. You are cautioned not to place any reliance on these forward-looking statements. Other than in accordance with their legal or regulatory obligations, neither Longevity nor 4D is under any obligation, and Longevity and 4D expressly disclaim any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

DEFINITIONS

The following definitions apply throughout this announcement unless the context otherwise requires:

All times referred to are London time unless otherwise stated.

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