Unassociated Document
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): July
2,
2007
Brainstorm
Cell Therapeutics Inc.
(Exact
name of registrant as specified in its charter)
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Delaware
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333-61610
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20-8133057
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(State
or other jurisdiction of incorporation)
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(Commission
File No.)
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(IRS
Employer Identification No.)
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110
East 59th
Street
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New
York, New York
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10022
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(Address
of principal executive offices)
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(Zip
Code)
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(212)
557-9000
(Registrant’s
telephone number, including area code)
N/A
(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:
o
Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
1.01 Entry into a Material Definitive Agreement.
On
July
2, 2007, Brainstorm Cell Therapeutics Inc. (the “Company”) entered into a
subscription agreement (the “Subscription Agreement”) with ACCBT Corporation
(the “Investor”), a company under the control of Mr. Chaim Lebovits, the newly
appointed President of the Company, pursuant to which the Company agreed to
sell
(i) up to 27,500,000 shares of the Company’s common stock, $0.00005 par value
per share (the “Common Stock”), for an aggregate subscription price of up to
$5.0 million (the “Subscription Shares”) and (ii) for no additional
consideration, if the Investor purchases the Subscription Shares, warrants
to
purchase up to 30,250,000 shares of Common Stock (the “Warrants”). Separate
closings of the purchase and sale of the Subscription Shares and the Warrants
shall take place as follows:
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Purchase
Date
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Purchase
Price
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Number
of
Subscription
Shares
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Number
of
Warrant
Shares
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August
30, 2007:
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$1,250,000
(of which $250,000 was
paid
on May 6, 2007)
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6,875,000
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7,562,500
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November
15, 2007:
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$750,000
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4,125,000
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4,537,500
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February
15, 2008:
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$750,000
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4,125,000
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4,537,500
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May
15, 2008:
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$750,000
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4,125,000
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4,537,500
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July
30, 2008:
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$750,000
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4,125,000
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4,537,500
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November
15, 2008:
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$750,000
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4,125,000
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4,537,500
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At
each
closing, the Company shall deliver to the Investor the number of Subscription
Shares and Warrants, subject to customary closing conditions and the delivery
of
funds, described above. The Warrants shall have the following exercise prices:
(i) the first 10,083,333 Warrants issued will have an exercise price of $0.20;
(ii) the next 10,083,333 Warrants issued will have an exercise price of $0.29;
and (iii) the final 10,083,334 Warrants issued will have an exercise price
of
$0.36. Each Warrant issued pursuant to the Subscription Agreement will expire
on
November 5, 2011.
As
a
condition to the Investor’s obligation to subscribe, the Company must, prior to
the first closing date, amend (i) the Research and License Agreement, dated
as
of March 30, 2006, by and between the Company and Ramot at Tel Aviv University
Ltd. (“Ramot”) and (ii) any related warrants issued to Ramot. The Company must
also obtain a waiver from Ramot under which Ramot waives any breaches of the
Company under the Research and License Agreement and the warrants.
As
a
condition to each closing, the market price per share may not be 10% less
than
the bid price per share under the Subscription Agreement on any trading day
between 30 and 10 days prior to any given closing date.
If,
at
any time prior to the first closing date, the Company issues Common Stock or
others securities convertible into, exercisable or exchangeable for Common
Stock, then the number of Subscription Shares and the price per share will
be
adjusted so the Investor will have the right to purchase up to 52.35% of the
equity of the Company on a fully diluted as converted basis (assuming the
Investor purchases all of the Subscription Shares and exercises in full all
of
the Warrants) and 50.02% of the issued and outstanding shares of Common Stock
of
the Company (assuming the Investor invests the full $5.0 million).
Pursuant
to the Subscription Agreement, the Investor and certain security holders of
the Company (the “Holders”) holding at least 31% of the issued and outstanding
shares of Common Stock of the Company will enter into a Security Holders
Agreement (the “Security Holders Agreement”). Under the Security Holders
Agreement, the Holders agree, upon the payment by the Investor of its first
$1.0
million under the Subscription Agreement, to vote all of their shares such
that
the Investor’s nominees to the Board of Directors of the Company will constitute
a minimum of 40% of the Board of Directors, and, upon the payment by the
Investor of its second $1.0 million, to vote all of their shares such that
the
Investor’s nominees will constitute a minimum of 50.1% of the Board of
Directors. Pursuant to the Subscription Agreement, however, should the Investor
stop making payments after the first closing date such that the Investor shall
have paid less than $4.0 million to the Company, the Investor will be entitled
to appoint only 40% of the members of the Board of Directors.
Under
the
Security Holders Agreement, the Holders also agree, for so long as the Investor
holds at least 5% of the issued and outstanding shares of Common Stock of the
Company, not to vote any of their shares to approve the following matters,
without the written consent of the Investor: (i) any change in the certificate
of incorporation of the Company or its bylaws, or alteration of the capital
structure of the Company; (ii) the declaration or payment of a dividend or
the
making of any distributions; (iii) the taking of any steps to liquidate,
dissolve, wind-up or otherwise terminate the corporate existence of the Company;
or (iv) the entering into any transaction the effect of which would place
control of the business of the Company in the hands of an arm’s length third
party.
Pursuant
to the Subscription Agreement, the Company and the Investor will enter into
a
Registration Rights Agreement (the “Registration Rights Agreement”), under which
the Investor is entitled to demand and piggyback registration rights, whereby
the Investor may request, upon thirty days written notice, the Company to file,
or to include within a registration statement to be filed, with the Securities
and Exchange Commission for the Investor’s resale of the Subscription Shares and
the shares of Common Stock issuable upon exercise of the Warrants.
In
connection with the Subscription Agreement, the Company agreed to issue,
upon
the first closing date, as a finder’s fee, 1,250,000 shares of Common Stock of
the Company to Tayside Trading Ltd. or its registered assigns.
The
foregoing descriptions of the Subscription Agreement, the Warrants, the
Registration Rights Agreement, the Security Holders Agreement and the
transactions contemplated therein and thereby, do not purport to be complete
and
are qualified in their entirety by reference to the full text of such agreements
and instruments, which are filed as exhibits hereto and are incorporated herein
by reference.
Item
3.02 Unregistered Sales of Equity Securities.
Item
1.01
is hereby incorporated by reference into this item.
On
June
27, 2007, pursuant to the terms of a $50,000 8% Convertible Promissory Note,
dated as of March 14, 2007, issued by the Company to Meir Rosenbaum, the Company
issued 225,347 shares of Common Stock of the Company to Meir Rosenbaum upon
receipt of written notice of his election to convert all of the outstanding
principal and interest amount of the note into shares of the Company’s Common
Stock. The conversion price was $0.2265.
On
May
28, 2007, pursuant to the terms of a $50,000 8% Convertible Promissory Note,
dated as of February 5, 2007, issued by the Company to Shia Rabinovich, the
Company issued 210,812 shares of Common Stock of the Company to Shia Rabinovich
upon receipt of written notice of his election to convert all of the outstanding
principal and interest amount of the note into shares of the Company’s Common
Stock. The conversion price was $0.243.
On
May
17, 2007, the Company issued 99,257 shares of the Company’s Common Stock to
Thomas Rosedale for legal services rendered by Mr. Rosedale and BRL Law Group
LLC.
The
issuance of the securities described in Items 1.01 and 3.02 was effected without
registration in reliance on Section 4(2) of the Securities Act of 1933, as
amended, and Regulation D promulgated thereunder, as a sale by the Company
not
involving a public offering. No underwriters were involved with the issuance
of
such securities.
Item
5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Item
1.01
is hereby incorporated by reference into this item.
On
July
2, 2007, Chaim Lebovits was appointed the President of the Company, which
appointment was effective immediately.
Mr.
Lebovits controls ACC Holdings, a holding company which controls three
subsidiaries: (i) C&L Natural Resources; (ii) ACC Resources; and (iii) the
Investor. C&L Natural Resources focuses on oil production in West Africa and
operates an oil and gas field with proven reserves of 20 million barrels of
oil
and an option to discover up to an additional 100 million barrels of oil.
ACC Resources holds 10 permits for gold exploration in Burkina Faso. The
Investor focuses on new and emerging biotechnologies. Mr. Lebovits has been
at
the forefront of mining and natural resource management in the African region
for close to a decade.
There
are
no family relationships between Mr. Lebovits and any director or other executive
officer of the Company.
Item
9.01 Financial Statements and Exhibits.
(d)
The
exhibits listed in the Exhibit Index below are filed with this
report.
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.
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Brainstorm
Cell
Therapeutics Inc. |
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| Date: July
5, 2007 |
By: |
/s/ Yoram
Drucker |
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Yoram
Drucker |
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Chief
Operating Officer |
EXHIBIT
INDEX
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Description
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10.1
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Subscription
Agreement, dated July 2, 2007, by and between the Registrant and
ACCBT
Corp.
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10.2
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Form
of Common Stock Purchase Warrant, issued by the Registrant to ACCBT
Corp.
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10.3
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Form
of Registration Rights Agreement, by and between the Registrant and
ACCBT Corp.
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Form
of Security Holders Agreement, by and between ACCBT Corp. and certain
security holders of the Registrant.
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99.1
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Press
Release, dated July 3, 2007, of the
Registrant.
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