Alliqua BioMedical, Inc.
1010 Stony Hill Road, Suite 200
Yardley, PA 19067
Telephone: (215) 702-8550
SUPPLEMENT TO PROXY STATEMENT
FOR THE SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 27, 2018
This is a supplement to the proxy statement, dated March 30, 2018 (the “Definitive Proxy Statement”), of Alliqua BioMedical, Inc. (“Alliqua” or the “Company”) that was mailed to you in connection with the solicitation of proxies for use at the special meeting of stockholders (the “Special Meeting”) to be held on April 27, 2018, at 9:00 a.m. at 1010 Stony Hill Road, Suite 200, Yardley, Pennsylvania 19067. The purpose of the Special Meeting is to consider and vote upon the following proposals: (i) a proposal (the “Asset Sale Proposal”) to approve the Asset Purchase Agreement (the “Asset Purchase Agreement”), dated as of January 5, 2018, by and between the Company and Celularity Inc., a Delaware corporation (“Buyer”), providing for the sale of our advanced biologic wound care business, including our Biovance and Interfyl product lines and MIST Therapy and other therapeutic ultrasound products, which may be deemed to be a sale of all, or substantially all, of our assets to Buyer on the terms and subject to the conditions set forth in the Asset Purchase Agreement (the “Asset Sale Transaction”); (ii) a proposal (the “Advisory Proposal”) to approve, on an advisory, non-binding basis, certain compensation that has, will or may be paid or become payable to the Company’s named executive officers in connection with the asset sale; and (iii) a proposal (the “Adjournment Proposal”) to adjourn or postpone the Special Meeting, if necessary or appropriate, for the purpose of soliciting additional votes for the approval of the Asset Sale Proposal. The Company’s board of directors (the “Board”) previously established March 23, 2018 as the record date for the purpose of determining the stockholders who are entitled to notice of and to vote at the Special Meeting or at any adjournment or postponement thereof.
After careful consideration, our Board determined that the Asset Purchase Agreement and the transactions contemplated thereby, including the Asset Sale Transaction, are fair to, and in the best interests of, the Company and its stockholders and approved, adopted and authorized, and declared advisable the Asset Purchase Agreement and the Asset Sale Transaction and the other transactions contemplated by the Asset Purchase Agreement. The Board made its determination after consultation with its legal and financial advisors and consideration of a number of factors. THE BOARD RECOMMENDS THAT THE STOCKHOLDERS OF THE COMPANY VOTE “FOR” THE ASSET SALE PROPOSAL, “FOR” THE ADVISORY PROPOSAL AND “FOR” THE ADJOURNMENT PROPOSAL.
Litigation relating to the Asset Sale Transaction
As previously disclosed, on February 22, 2018 a putative stockholder class action complaint was filed in the United States District Court for the District of Delaware against us and each member of the Board, captioned Ronald Cresta, Individually and on Behalf of All Others Similarly Situated v. Alliqua BioMedical Inc., David Johnson, Joseph M. Leone, Gary Restani, Jeffrey Sklar and Mark Wagner. The complaint alleges, among other things, that we and the Board violated federal securities laws and regulations by soliciting stockholder votes in connection with the Asset Sale Transaction through a proxy statement that omits material facts necessary to make the statements therein not false or misleading. The complaint seeks, among other things, to enjoin us and the Board from conducting the stockholder vote on the Asset Sale Transaction unless and until the allegedly omitted material information is disclosed to the Company’s stockholders, damages allegedly suffered by the plaintiffs as a result of the asserted omissions, as well as related attorneys’ fees and expenses.
On March 28, 2018, the plaintiff in the above lawsuit filed a motion for preliminary injunction seeking to enjoin the Company and the Board from taking any steps to consummate the Asset Sale Transaction unless and until certain allegedly omitted material information is disclosed to the Company’s stockholders.
The Company and the other defendants named in the litigation believe that the claims asserted in the litigation are without merit and no supplemental disclosure is required under applicable law. However, in order to avoid the risk of the litigation delaying or adversely affecting the Asset Sale Transaction and to