Welcome!

News Feed Item

Monster Digital and Innovate Biopharmaceuticals Enter into Letter of Intent regarding Reverse Merger

SIMI VALLEY, CA -- (Marketwired) -- 06/19/17 -- Monster Digital, Inc. (NASDAQ: MSDI) ("Monster Digital"), today announced that it has entered into a non-binding letter of intent ("LOI") which contemplates a proposed reverse merger ("Merger") with Innovate Biopharmaceuticals, Inc. ("Innovate").

The LOI contemplates execution of a merger agreement (the "Merger Agreement") whereby the security holders of Innovate would receive Monster Digital securities in the Merger, in exchange for securities held in Innovate. Following the closing (the "Closing") of the anticipated Merger, Innovate would become a wholly owned subsidiary of Monster Digital, and Monster Digital, as the surviving company, would be renamed "Innovate Biopharmaceuticals, Inc." The common stock of the combined company would continue to trade on the Nasdaq Capital Market under a new symbol to reflect the name change.

For purposes of determining the exchange rate used to calculate the number of Monster Digital common shares that would be issued to Innovate's stockholders, the LOI provides that Innovate would have a deemed valuation of $60 million fully diluted by all of its outstanding shares of common stock and outstanding options and warrants, and Monster Digital would have a deemed valuation of $6 million fully diluted by all outstanding shares of its common stock, but excluding currently outstanding (i) warrants issued in connection with its initial public offering and (ii) warrants and options having a per share exercise price of $5.00 and above, such valuation to be reduced by any liabilities of Monster Digital assumed by Innovate at the Closing. Monster Digital's deemed valuation would be adjusted based on a net cash calculation prior to closing, which could be a negative number to the extent its liabilities exceed its cash and cash equivalents on hand at such time.

Based on these relative valuations (without adjustment), we anticipate that the security holders of Innovate and Monster Digital would hold approximately 90.90% and 9.10%, respectively, of the combined company, subject to proportional dilution for anticipated financing in connection with the closing of the Merger as referenced in the following paragraph.

Completion of the Merger is subject to the negotiation of a definitive Merger Agreement and related documentation, approval of the Merger by Monster Digital's Board of Directors and stockholders, approval of the continued listing by Nasdaq of Monster Digital common stock on the Nasdaq Capital Market on a post-Merger basis (which is anticipated to require raising additional financing in connection with the closing of the Merger), and satisfaction of other conditions that are to be negotiated as part of the Merger Agreement. Accordingly, there can be no assurance that a Merger Agreement will be entered into or that the proposed Merger will be consummated. Further, readers are cautioned that those portions of the LOI that describe the proposed Merger, including the consideration to be issued therein, are non-binding.

Assuming Monster Digital and Innovate enter into the Merger Agreement, the parties will look to seek shareholder approval from Monster Digital's stockholders in the third quarter of 2017, subject to SEC staff review of the proxy statement to be filed by Monster Digital for the proposed transaction.

Commenting on the potential Merger, Innovate CEO Christopher P. Prior, Ph.D., stated: "After significantly expanding our pipeline with the addition of the only late-stage drug for celiac disease, I believe the next logical step in our corporate development is having our stock quoted in a public market. We believe that the greater access to capital and overall visibility afforded by operating as a publicly-traded organization should play a role in our ability to advance our clinical pipeline, as well as continue to in-license and develop drugs for autoimmune/inflammation diseases."

Monster Digital CEO David H. Clarke added, "Our Board of Directors and management believe that a merger with Innovate is the best option for our company. Upon a definitive merger agreement being signed and prior to the Closing, we anticipate that the Monster Digital operating business will be sold or spun off into a separate company."

About Monster Digital, Inc.

Monster Digital develops, markets and distributes Monster branded products for use in high-performance consumer electronics, mobile products and computing applications. The Company designs and engineers premium action sports cameras and accessories, in addition to advanced data storage and memory products for professionals and consumers.

Monster and Monster Digital are registered trademarks of Monster Products, Inc. in the U.S. and other countries.

For more information about the Company, please visit http://www.monsterdigital.com

About Innovate Biopharmaceuticals, Inc.

Innovate Biopharmaceuticals is a clinical stage biotechnology company focused on developing novel autoimmune/inflammation medicines.

Innovate's lead drug candidate, larazotide acetate (INN-202), is the only drug which has successfully met its primary endpoint in an efficacy clinical trial for celiac disease. Larazotide successfully completed the End of Phase 2 Meeting to prepare for Phase 3 clinical trials for larazotide in celiac disease later this year. In clinical studies in more than 800 patients, larazotide has demonstrated a favorable safety profile comparable to placebo, due to its lack of systemic absorption from the small bowel. Larazotide has also received Fast Track designation from the FDA.

We believe that larazotide, a novel oral peptide formulated into a capsule, has a unique mechanism of action which decreases intestinal permeability and regulates tight junctions by reducing antigen trafficking across epithelial cells in the intestines. To our knowledge, larazotide is the only drug in the clinic with this unique mechanism of action of reducing intestinal permeability. Increased intestinal permeability, sometimes referred to as "leaky gut," has been recognized as a gateway to multiple autoimmune diseases, including celiac disease, irritable bowel syndrome (IBS), inflammatory bowel diseases (IBD: Crohn's and ulcerative colitis), type 1 diabetes mellitus (T1DM), nonalcoholic steatohepatitis (NASH), chronic kidney disease (CKD) and several others.

Innovate's second therapeutic in clinical development, INN-108, is a novel oral small molecule that will enter Phase 2 trials for the treatment of mild to moderate ulcerative colitis. INN-108 is a prodrug delivery system of two approved drugs that only becomes activated in the colon. The convenience of a liquid oral formulation will be important to children and the aging.

For more information, please visit http://www.innovatebiopharma.com

Forward Looking Statements
Some of the statements in this release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties. These statements relate to future events, future expectations, plans and prospects. Although Monster Digital believes that the expectations reflected in such forward-looking statements are reasonable as of the date made, expectations may prove to have been materially different from the results expressed or implied by such forward-looking statements. Monster Digital has attempted to identify forward-looking statements by terminology including "possible," "may," "believe" or other words that convey uncertainty of future events or outcomes to identify these forward-looking statements. Forward-looking statements include, among others, statements regarding the proposed reverse-merger transaction with Innovate and the mechanism of action and therapeutic effects of larazotide acetate. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors, including those discussed under the heading "Risk Factors" in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 2017, and in our Quarterly Report on Form 10-K filed with the Securities and Exchange Commission on May 19, 2017, and in other documents filed by us from time to time with the Securities and Exchange Commission. Any forward-looking statements contained in this release speak only as of its date. We undertake no obligation to update any forward-looking statements contained in this release to reflect events or circumstances occurring after its date or to reflect the occurrence of unanticipated events.

Contacts:
Monster Digital, Inc.
David Olert
CFO
[email protected]

Investor Relations:
Monster Digital, Inc.
Vivian Cervantes
PCG Advisory
212-554-5482
[email protected]

Innovate Biopharmaceuticals, Inc.
Kendyle Woodard
919-275-1933
[email protected]

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
@DevOpsSummit at Cloud Expo taking place Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center, Santa Clara, CA, is co-located with the 21st International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is ...
SYS-CON Events announced today that Datanami has been named “Media Sponsor” of SYS-CON's 21st International Cloud Expo, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Datanami is a communication channel dedicated to providing insight, analysis and up-to-the-minute information about emerging trends and solutions in Big Data. The publication sheds light on all cutting-edge technologies including networking, storage and applications, and the...
After more than five years of DevOps, definitions are evolving, boundaries are expanding, ‘unicorns’ are no longer rare, enterprises are on board, and pundits are moving on. Can we now look at an evolution of DevOps? Should we? Is the foundation of DevOps ‘done’, or is there still too much left to do? What is mature, and what is still missing? What does the next 5 years of DevOps look like? In this Power Panel at DevOps Summit, moderated by DevOps Summit Conference Chair Andi Mann, panelists loo...
SYS-CON Events announced today that EnterpriseTech has been named “Media Sponsor” of SYS-CON's 21st International Cloud Expo, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. EnterpriseTech is a professional resource for news and intelligence covering the migration of high-end technologies into the enterprise and business-IT industry, with a special focus on high-tech solutions in new product development, workload management, increased effi...
You know you need the cloud, but you’re hesitant to simply dump everything at Amazon since you know that not all workloads are suitable for cloud. You know that you want the kind of ease of use and scalability that you get with public cloud, but your applications are architected in a way that makes the public cloud a non-starter. You’re looking at private cloud solutions based on hyperconverged infrastructure, but you’re concerned with the limits inherent in those technologies.
For organizations that have amassed large sums of software complexity, taking a microservices approach is the first step toward DevOps and continuous improvement / development. Integrating system-level analysis with microservices makes it easier to change and add functionality to applications at any time without the increase of risk. Before you start big transformation projects or a cloud migration, make sure these changes won’t take down your entire organization.
Cloud promises the agility required by today’s digital businesses. As organizations adopt cloud based infrastructures and services, their IT resources become increasingly dynamic and hybrid in nature. Managing these require modern IT operations and tools. In his session at 20th Cloud Expo, Raj Sundaram, Senior Principal Product Manager at CA Technologies, will discuss how to modernize your IT operations in order to proactively manage your hybrid cloud and IT environments. He will be sharing bes...
A look across the tech landscape at the disruptive technologies that are increasing in prominence and speculate as to which will be most impactful for communications – namely, AI and Cloud Computing. In his session at 20th Cloud Expo, Curtis Peterson, VP of Operations at RingCentral, highlighted the current challenges of these transformative technologies and shared strategies for preparing your organization for these changes. This “view from the top” outlined the latest trends and developments i...
Automation is enabling enterprises to design, deploy, and manage more complex, hybrid cloud environments. Yet the people who manage these environments must be trained in and understanding these environments better than ever before. A new era of analytics and cognitive computing is adding intelligence, but also more complexity, to these cloud environments. How smart is your cloud? How smart should it be? In this power panel at 20th Cloud Expo, moderated by Conference Chair Roger Strukhoff, paneli...
SYS-CON Events announced today that MobiDev, a client-oriented software development company, will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. MobiDev is a software company that develops and delivers turn-key mobile apps, websites, web services, and complex software systems for startups and enterprises. Since 2009 it has grown from a small group of passionate engineers and business...
Hardware virtualization and cloud computing allowed us to increase resource utilization and increase our flexibility to respond to business demand. Docker Containers are the next quantum leap - Are they?! Databases always represented an additional set of challenges unique to running workloads requiring a maximum of I/O, network, CPU resources combined with data locality.
SYS-CON Events announced today that GrapeUp, the leading provider of rapid product development at the speed of business, will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Grape Up is a software company, specialized in cloud native application development and professional services related to Cloud Foundry PaaS. With five expert teams that operate in various sectors of the market acr...
SYS-CON Events announced today that Ayehu will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on October 31 - November 2, 2017 at the Santa Clara Convention Center in Santa Clara California. Ayehu provides IT Process Automation & Orchestration solutions for IT and Security professionals to identify and resolve critical incidents and enable rapid containment, eradication, and recovery from cyber security breaches. Ayehu provides customers greater control over IT infras...
Artificial intelligence, machine learning, neural networks. We’re in the midst of a wave of excitement around AI such as hasn’t been seen for a few decades. But those previous periods of inflated expectations led to troughs of disappointment. Will this time be different? Most likely. Applications of AI such as predictive analytics are already decreasing costs and improving reliability of industrial machinery. Furthermore, the funding and research going into AI now comes from a wide range of com...
In this presentation, Striim CTO and founder Steve Wilkes will discuss practical strategies for counteracting fraud and cyberattacks by leveraging real-time streaming analytics. In his session at @ThingsExpo, Steve Wilkes, Founder and Chief Technology Officer at Striim, will provide a detailed look into leveraging streaming data management to correlate events in real time, and identify potential breaches across IoT and non-IoT systems throughout the enterprise. Strategies for processing massive ...