Oncotelic Therapeutics, Inc. (Form: 8-K, Received: 04/29/2024 07:16:26)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

April 26, 2024

ONCOTELIC THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

Delaware

000-21990

13-3679168

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

29397 Agoura Road, Suite 107

Agoura Hills, CA 91301

(Address of principal executive offices and Zip Code)

Registrant’s telephone number, including area code

(650) 635-7000

Not applicable.

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of class		Trading Symbols		Name of each exchange on which registered
N/A		OTLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 8.01 Other Events.

On April 29, 2024, Oncotelic Therapeutics, Inc. (the “Company”) issued a press release announcing that the Company had entered into a binding term sheet (the “Term Sheet”) with Mosaic ImmunoEngineering, Inc. (“Mosaic”). The Term Sheet was entered into on April 26, 2024.

As per the terms contained in the Term Sheet, Mosaic will pay Oncotelic $15 million in shares upon the closing of a definitive agreement for certain pre-agreed indications of CA4P. In addition, Oncotelic may earn upto $15 million in cash and $15 million in shares of Mosaic, upon achievement of certain agreed upon milestones. Additional terms of the Term Sheet include that (1) Mosiac to continue the development work necessary to achieve the mutually agreed upon milestones which will include an annual budget of $2.0 – $2.5 million, (2) Oncotelic will loan Mosaic funds to cover Mosaic’s annual audit and operational costs till June 1, 2024, at terms to be decided, and repayable upon Mosaic raising financings of $2 million or more, in cash or additional shares of Mosaic (3) Oncotelic will assist Mosaic to raise at least $2 million to fund the operations of Mosaic and (4) in the event Oncotelic is unable to assist Mosiac raise the required funds as per clause 3 above, then the transaction shall move forward as a reverse acquisition/merger, with conditions typical of such a transaction. Pursuant to the Term Sheet, the parties agreed to negotiate in good faith towards the execution of the Definitive Agreements and the closing of the transactions contemplated thereby, which will be subject to customary due diligence and other conditions as described in the Term Sheet.

A copy of the press release is attached hereto as Exhibit 99.1.

Disclaimer.

The information in Section 7.01 of this Current Report on Form 8-K, including the information set forth in Exhibits 10.1 and 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall Exhibit 99.1 filed herewith be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description	Filed on

10.1	Binding Term Sheet dated April 26, 2024	April 29, 2024
99.1	Press Release dated April 29, 2024	April 29, 2024
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		Mosaic ImmunoEngineering Inc.

Date: April 29, 2024	By:	/s/ Vuong Trieu
		Vuong Trieu, Ph. D.
		President and Chief Executive Officer, Director

Exhibit 10.1

CONFIDENTIAL

April 26, 2024

Oncotelic Therapeutics, Inc.

Vuong Trieu

29397 Agoura Rd, Suite 107

Agoura Hills, CA 91301

Dear Vuong:

This letter, together with the attached binding term sheet attached hereto, sets forth our mutual understanding regarding a possible commercial relationship referred to as the “Transaction” between Mosaic ImmunoEngineering, Inc., a Delaware corporation (“Mosaic”) and Oncotelic Therapeutics, Inc., a Delaware corporation (“Oncotelic”). It is understood that any such transaction is subject to our mutual agreement on terms through a definitive document entered into by Mosaic and Oncotelic formalizing the Transaction.

1. Terms. Attached as Exhibit A to this letter is a summary of the terms of the Transaction (“Term Sheet”). The Term Sheet does not purport to include all conditions, covenants, representations, warranties and other terms that would be contained in definitive documents for the Transaction. However, this letter confirms each parties agreement to use commercially reasonable efforts to negotiate and enter into definitive agreements for the Transaction in accordance with the terms set forth on the Term Sheet.

2. Due Diligence. Subject to execution of mutually satisfactory confidentiality agreements, Mosaic and Oncotelic each agree to provide representatives of other, and its accounting, legal and other advisers, with reasonable access to the information that such party reasonably requests for purposes of evaluating the Transaction. Each party shall commence due diligence upon the signing of this letter and complete such due diligence within 30 days of the signing of this letter. Each party shall cause its employees, officers, directors, consultants, representatives, advisors and agents to, cooperate with the other party in its due diligence review.

3. Miscellaneous. This letter may be signed in counterparts, all of which shall constitute the same agreement, and shall be governed by the substantive laws of California. This offer, unless accepted, will expire at 5:00 p.m. Pacific time, on May 1, 2024.

If the foregoing is in accordance with your understanding, please sign this letter in the space indicated below.

	Very truly yours,
	MOSAIC IMMUNOENGINEERING, INC.

	/s/ Steven King

	Steven King
	President and CEO

9114 Adams Avenue, #202, Huntington Beach, CA 94646

www.mosaicie.com | info@mosaicie.com

The foregoing is hereby
Agreed to and accepted:

ONCOTELIC THERAPEUTICS, INC.

By	/s/ Vuong Trieu

Its	CEO

Date	4/26/2024

EXHIBIT A

TERMS FOR THE TRANSACTION

Effective Date	April 26, 2024

Transaction:	Mosaic will acquire from Oncotelic certain assets and technologies described below (the “Oncotelic Technologies”) in exchange for equity interests in Mosaic as part of a transaction (the “Transaction”). The parties will explore the most tax advantageous structure for the Transaction.

Acquisition of Oncotelic Technologies:	Mosaic will acquire the Oncotelic Technologies in exchange for 47,923,322 unregistered shares of common stock of Mosaic (the “Consideration”) valued at $15.0 million based on a price of $0.313 being the closing share price of Mosaic’s common stock on the date that is one day prior to the Effective Date. If necessary to complete the Transaction, Mosaic shall issue Oncotelic shares of convertible preferred stock for a portion of the Consideration. The rights, privileges and preferences for the preferred stock shall be defined in the definitive agreement, if applicable. In addition, Mosaic shall pay to Oncotelic additional Consideration in the form of an earn out based on achievement of mutually acceptable milestones to be achieved within 4 years (i.e. licensing transaction(s) resulting in at least an additional $15.0 million in aggregate cash proceeds received by the Company) to be agreed and reflected in the definitive agreements for the transaction. The amount of the earnout Consideration shall be up to $15.0 million which shall be payable in additional shares of common stock of Mosaic valued at the time of issuance.

Oncotelic Technologies	The Oncotelic Technologies to be transferred include components related to Necroptosis Cancer including: 1) a license to CA4P for direct intratumoral administration, all veterinary applications and all ocular disease applications including all regulatory, CMC, clinical and nonclinical data packages submitted to any regulatory authorities including but not limited to the FDA, EMA, Health Canada and the MHRA for CA4P; and 2) non-exclusive access to AI technologies and IP for the development of CA4P for these indications including biomarker and patient selection.

Development Activities:	Mosaic will continue the development work necessary to achieve the mutually agreed upon milestones which will include an annual budget of $2.0 – $2.5 million. The specifics of the budget will be mutually agreed upon between Mosaic and Oncotelic.

A-1

Representations and Warranties:	The definitive agreements for the Transaction will contain representations, warranties and covenants of Oncotelic and Mosaic customary for transactions of this nature.

Fees and Expenses:	The respective fees and expenses including financial adviser, broker, legal, accounting and other fees shall be included in the annual budget.

Other Covenants:	1)	Oncotelic will advance to Mosaic the mutually agreed upon cost of Mosaic’s annual audit and operational costs of Mosaic until June 1st, 2024. Payments will be made following receipt of invoices. Such payments shall be treated as a loan, and shall be repaid in cash upon the closing of a financing raising at least $2.0 million or repaid with additional shares of common stock of Mosaic (valued at the time of such issuance), as requested by Oncotelic.

	2)	Mosaic will use commercially reasonable efforts to seek to raise $2.0 million in an equity financing to fund its annual budget and operating costs. Oncotelic will cooperate with Mosaic in its financing efforts, including attending meetings and providing technical support related to the Oncotelic Technologies.

	3)	In the event that Mosaic is unable to secure an equity financing in an amount sufficient to support ongoing operations, the transaction will proceed as a reverse merger of an Oncotelic subsidiary into Mosaic, as well as the transition of management, board of directors and assumption of Mosaic’s liabilities as is typical in a reverse merger. Mosaic will use reasonable best efforts within its control to convert existing liabilities of Mosaic into shares of common stock of Mosaic, provided such conversion has no tax consequences to liability holders.

Expiration and Conditions:	This Term Sheet shall be considered binding and shall expire on the earlier of (1) the execution and delivery of mutually acceptable definitive agreements for the Transaction or (2) 90 days from the Effective Date. In addition, the execution of definitive agreements and the consummation of the Transaction on the terms set forth in the Term Sheet is subject to the following conditions:

	●	Each party’s satisfaction with its due diligence review of the other party’s business and operations.

	●	The negotiation of mutually acceptable definitive agreements for the Transaction.

	●	The approval of each party’s shareholders to the extent required by applicable corporate law or securities regulation, including the rules of any applicable stock exchange.

	●	Mosaic receiving waivers from at least 90% of its convertible note holders under Section 4 of the Convertible Note Purchase Agreement, whereby holders would agree to waive any payment due in cash due upon a “Corporate Transaction”, as defined therein.

	Either party may terminate this Term Sheet upon failure of one or more of the forgoing conditions.

A-2

Exhibit 99.1

Oncotelic Therapeutics, Inc. to Sell Its Necroptosis Cancer Therapy Assets to Mosaic ImmunoEngineering, Inc.

AGOURA HILLS, Calif., April 29, 2024 (GLOBE NEWSWIRE) – Oncotelic Therapeutics, Inc. (OTCQB:OTLC) (“Oncotelic”, the “Company” or “We” or “Our”), announced today that it has entered into a binding term-sheet with Mosaic ImmunoEngineering, Inc. (OTCPK: CPMV) (“Mosaic”) under which Mosaic will acquire rights to Oncotelic’s clinical-stage necroptosis cancer therapies. Oncotelic’s necroptosis therapeutics work by disrupting tumor blood flow resulting in immunogenic tumor cell death through “death receptor” activation which can result in a robust anti-cancer immune response. In addition to the clinical stage assets, Mosaic will have access to Oncotelic’s proprietary Artificial Intelligence (“AI”) technologies for identifying immunotherapy combinations.

Pursuant to the binding term-sheet, Mosaic will issue to Oncotelic $15 million in CPMV shares upon execution of the definitive purchase agreement along with additional milestones allowing Oncotelic to earn up to an additional $15 million in shares of CPMV. The Mosaic team, which has broad experience in bringing oncology and orphan drug products to market with a combined experience including well over 30 FDA and worldwide product approvals, will be responsible for advancing the development of the technologies. Both companies will work closely together to ensure a smooth transfer of the technologies from Oncotelic to Mosaic. Oncotelic will provide short-term financial support for the program while the teams work together to achieve both short-term and long-term financing goals. Pursuant to the binding term sheet, the parties agreed to negotiate in good faith towards the execution of the Definitive Agreements and the closing of the transactions contemplated thereby, which will be subject to customary due diligence and other conditions as described in the binding term sheet.

“This will be the second transaction for capitalizing on our assets and building shareholder value. The first being the successful transition of OT-101 to our joint venture (“JV”) with Dragon Capital Overseas, Limited. The JV is expected to list for an IPO, as well as the completion of establishing a research and manufacturing facility headquartered in San Diego, California.” expressed Dr. Vuong Trieu, CEO of Oncotelic.

“We are very pleased to have this opportunity to bring these clinical stage assets that have promise for the treatment of multiple types of cancer into Mosaic. We anticipate that the initial application of the technology will be in areas with high unmet medical need such as uveal melanoma and retinoblastoma. We look forward to working with the Oncotelic team to advance the program.” said Steven King, President and CEO of Mosaic.

About Mosaic

Mosaic ImmunoEngineering, Inc. is a development-stage biotechnology company focused on advancing cancer therapies for areas of high unmet medical need. Mosaic’s management and board of directors have broad experience in bringing oncology and orphan drug products to the market with combined experience of well over 30 FDA and worldwide product approvals. For additional information about Mosaic, please visit www.MosaicIE.com.

About necroptosis cancer therapies

A recent approval of tumor infiltrating lymphocyte (“TIL”) cell therapy demonstrates how to manipulate patient immunity against cancer for lasting cure. However, TIL cell therapy is costly, time consuming and technologically challenging. Instead of driving TIL cells externally, Necroptosis Cancer Therapies drive innate TILs to the tumor. The key step is the induction of necrotic cell death and activation of death genes, exposing tumorreactive antigens to initiate an immune response, activating antigen-presenting cells to achieve large-scale antigen presentation, activating T-cells, inducing strong and sustained cytotoxic T lymphocyte responses, and ultimately triggering an TIL antitumor immune effect. Necroptosis Cancer Therapies can use vascular disrupting agents (“VDA”), in combination with CheckPoint Inhibitors and other IO agents to drive TIL cells to the tumor. Our VDA, CA4P, is a component for the TIL/Necroptosis Cancer Therapies. Our Necroptosis Cancer Therapies are being developed in conjunction with AI technology using our list of proprietary death genes.

About Oncotelic

Oncotelic (f/k/a Mateon Therapeutics, Inc.), was formed in the State of New York in 1988 as OXiGENE, Inc., was reincorporated in the State of Delaware in 1992, and changed its name to Mateon Therapeutics, Inc. in 2016, and Oncotelic Therapeutics, Inc. in November 2020. Oncotelic is seeking to leverage its deep expertise in oncology drug development to improve treatment outcomes and survival of cancer patients with a special emphasis on rare pediatric cancers. Oncotelic has rare pediatric designation for Diffuse Intrinsic Pontine Glioma (“DIPG” through OT-101) through its 45% joint venture, GMP Biotechnology Limited, melanoma (through CA4P), and Acute Myeloid Leukemia (through OXi 4503). Oncotelic also acquired PointR Data Inc. in November 2019 to build an AI driven biotechnology company. Further, Oncotelic acquired AL-101, during the 4th quarter of 2021, for the intranasal delivery of apomorphine. We intend to develop AL-101 for the treatment of Parkinson Disease, erectile dysfunction, female sexual disorder and hypoactive sexual desire disorder. All these ailments have a very large population suffering from them and there is a need for treatments for each. For more information on AL-101, refer to our 2023 Annual Report on Form 10-K filed with the SEC on April 12, 2024.

Oncotelic’s Cautionary Note on Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this communication regarding strategy, future operations, future financial position, prospects, plans and objectives of management are forward-looking statements. Words such as “may”, “expect”, “anticipate” “hope”, “vision”, “optimism”, “design”, “exciting”, “promising”, “will”, “conviction”, “estimate,” “intend,” “believe”, “quest for a cure of cancer”, “innovation-driven”, “paradigm-shift”, “high scientific merit”, “impact potential” and similar expressions are intended to identify forward-looking statements. Forward looking statements contained in this press release include, but are not limited to, statements about future plans related to the operations of the JV, taking the JV into an initial public offering or the success thereof, the progress, timing of clinical development, scope and success of future clinical trials, the reporting of clinical data for the Company’s product candidates and the potential use of the Company’s product candidates to treat various cancer indications as well as obtaining required regulatory approval to conduct clinical trials and upon granting of approval by the regulatory agencies, the successful marketing of the products; building and the success of our nanoparticle platform and the related success of launching the platform, the success of any contemplated transactions similar to the one described under this press release. Each of these forward-looking statements involves risks and uncertainties, and actual results may differ materially from these forward-looking statements or may not occur at all. Many factors may cause differences between current expectations and actual results, including unexpected safety or efficacy data observed during preclinical or clinical studies, clinical trial site activation or enrollment rates that are lower than expected, changes in expected or existing competition, changes in the regulatory environment, failure of collaborators to support or advance collaborations or product candidates and unexpected litigation or other disputes, taking the Company or its affiliates through initial public offerings. These risks are not exhaustive, the company faces known and unknown risks, including the risk factors described in the Company’s 2023 Annual Report on Form 10-K filed with the SEC on April 12, 2024 and in the company’s other periodic filings. Forward-looking statements are based on expectations and assumptions as of the date of this press release. Except as required by law, the company does not assume any obligation to update forward-looking statements contained herein to reflect any change in expectations, whether because of new information, future events, or otherwise.

Contact Information:

For Oncotelic Therapeutics, Inc.:

Investor Relations

ir@oncotelic.com