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Qualigen, Ritter Pharmaceuticals to merge in all-stock deal

Private healthcare equipment company Qualigen Inc. agreed to merge with Ritter Pharmaceuticals Inc. in an all-stock deal.

The new company, which is expected to change its name to Qualigen Inc., will focus on developing Qualigen's nanotechnology therapies that target cancer and infectious diseases.

According to the terms of the agreement, pre-merger Ritter Pharmaceuticals' stockholders will own about 7.5% of the post-merger company while pre-merger Qualigen's stockholders will own about 92.5% of the new company.

The merger, approved by the board of both companies, is expected to be completed in the second quarter of 2020, subject to stockholder approvals.

Under a separate contingent value right agreement, the rights holder will continue to seek opportunities to monetize Ritter's experimental medication for lactose intolerance, RP-G28. Net proceeds from any potential monetization will be distributed among Ritter's pre-merger stockholders.

Los Angeles-based Ritter's stockholders of record at the time of the merger will receive nontransferable contingent value rights, giving them rights to receive proceeds from a potential sale, license, transfer, spin-off or other monetizing event of all or any part of Ritter's current business or all or any part of its intellectual property or technology entered during the period starting on the date of the deal and ending three years after closing date of the merger.

Following the merger, Qualigen's chairman, president and CEO, Michael Poirier, will be the combined company's chairman, president and CEO. The board for the combined company will have seven directors, including one member from Ritter's legacy board.

A.G.P./Alliance Global Partners is financial adviser to Ritter, while GreenBlock Capital is financial adviser to Qualigen for the transaction. Reed Smith LLP is the legal counsel to Ritter and Stradling Yocca Carlson & Rauth is legal counsel to Qualigen.