As a result of the Merger and upon the Closing Date, among other
things, each common share of Old Gelesis that was issued and
outstanding immediately prior to the effective time of the Merger,
after giving effect to the conversion of all preferred shares of
Old Gelesis into common shares of Old Gelesis immediately prior to
the effective time, was canceled and converted into the right to
receive a number of shares of New Gelesis Common Stock equal to an
exchange ratio of approximately 2.59 multiplied by the number of
common shares of Old Gelesis held by such holder immediately prior
to the effective time. In addition, (a) all vested and
unvested stock options of Old Gelesis were assumed by New Gelesis
and (b) each warrant of Old Gelesis was cancelled in exchange
for a warrant to purchase shares of New Gelesis, in each case based
on an implied equity value of $675,000,000 as of the Closing.
In the Business Combination, PureTech Health received (i)
13,408,937 shares of Common Stock in exchange for its Old Gelesis
common stock and preferred stock, (ii) 155,520 New Gelesis common
stock options in exchange for its Old Gelesis stock options and
(iii) 216,208 warrants to purchase shares of Common Stock of New
Gelesis in exchange for its Old Gelesis warrants. Also, pursuant to
the terms of the Business Combination Agreement, former holders of
Old Gelesis common shares, preferred shares, stock options and
warrants received the right to acquire their pro rata portion of an
aggregate of 23,483,250 additional shares of Common Stock (the
“Earn-Out Shares”), which
will vest in the event the price per share of the Common Stock
exceeds certain thresholds for any 20 trading days within any
30-trading day period on or
prior to January 13, 2027 or upon certain change of control
transactions. PureTech Health received 4,526,622 Earn-Out Shares.
PIPE Investment
On the Closing Date, concurrently with the closing of the Business
Combination, certain investors (the “PIPE Investors”), including
PureTech Health, purchased from the Issuer an aggregate of
9,000,000 shares of Common Stock (the “PIPE Shares”), for a
purchase price of $10.00 per share, pursuant to separate
subscription agreements entered into and effective as of
July 19, 2021 (each a “Subscription Agreement”). PureTech
Health purchased 1,500,000 PIPE Shares for a purchase price of
$15.0 million.
Backstop Agreement
On December 30, 2021, the CPSR entered into a Backstop
Agreement (the “Backstop Agreement”) with the purchasers party
thereto (the “Backstop Purchasers”), including PureTech Health,
pursuant to which the Backstop Purchasers agreed to purchase an
aggregate of up to 1,500,000 Shares immediately prior to the
Closing at a cash purchase price of $10.00 per share, resulting in
aggregate proceeds of up to $15.0 million, which amount, when
added to the proceeds from the PIPE financing, was expected to
ensure that the minimum cash condition to closing the Business
Combination was satisfied. In accordance with the terms and
conditions of the Backstop Agreement, the Backstop Purchasers
purchased 744,217 shares immediately prior to Closing for an
aggregate purchase price of $7.4 million, of which 496,145
shares were purchased by PureTech Health for an aggregate price of
$5.0 million (the “Backstop Purchase Shares”). In addition,
subject to the terms and conditions of the Backstop Agreement, at
the closing of the sale of the shares purchased by the Backstop
Purchasers, the Company issued to the Backstop Purchasers an
additional 1,983,750 Shares, of which 1,322,500 were issued to
PureTech Health (the “Backstop Sponsor Shares,” and collectively
with the Backstop Purchase Shares, the “Backstop Shares”).
PureTech Health obtained the funds for the purchase of the PIPE
Shares and the Backstop Purchase Shares from its working
capital.
Item 4. Purpose of Transaction
The information contained in Item 1 and Item 3 above is herein
incorporated by reference.
The shares of Common Stock reported in this Schedule 13D were
acquired for the purpose of investment and were not intended to and
did not effect any change in the control of the Issuer.
The Reporting Persons from time to time intend to review their
investment in the Issuer on the basis of various factors, including
the Issuer’s business, financial condition, results of operations
and prospects, general economic and industry conditions, the
securities markets in general and those for the shares of the
Issuer’s Common Stock in particular, as well as other developments
and other investment opportunities. Based upon such review, the
Reporting
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