Attached files
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EX-3.1 - CALADRIUS BIOSCIENCES, INC. | v202889_ex3-1.htm |
EX-1.2 - CALADRIUS BIOSCIENCES, INC. | v202889_ex1-2.htm |
EX-4.1 - CALADRIUS BIOSCIENCES, INC. | v202889_ex4-1.htm |
EX-5.1 - CALADRIUS BIOSCIENCES, INC. | v202889_ex5-1.htm |
EX-1.1 - CALADRIUS BIOSCIENCES, INC. | v202889_ex1-1.htm |
EX-4.2 - CALADRIUS BIOSCIENCES, INC. | v202889_ex4-2.htm |
EX-10.2 - CALADRIUS BIOSCIENCES, INC. | v202889_ex10-2.htm |
EX-10.1 - CALADRIUS BIOSCIENCES, INC. | v202889_ex10-1.htm |
EX-99.1 - CALADRIUS BIOSCIENCES, INC. | v202889_ex99-1.htm |
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): November 16,
2010
NeoStem,
Inc.
(Exact
Name of Registrant as Specified in Charter)
Delaware
(State
or Other Jurisdiction of Incorporation)
|
0-10909
(Commission
File
Number)
|
22-2343568
(IRS
Employer Identification
No.)
|
420 Lexington Avenue, Suite
450, New York, New York 10170
(Address
of Principal Executive Offices)(Zip Code)
(212)
584-4180
Registrant's
Telephone Number
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):
x
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.
Underwritten
Offering
On
November 16, 2010, NeoStem, Inc. (the “Company”) entered into an Underwriting
Agreement (the “Underwriting Agreement”) with Cowen and Company, LLC, as
representative of the underwriters named in the Underwriting Agreement (the
“Underwriters”), relating to a public offering (the “Underwritten Offering”) by
the Company underwritten on a firm commitment basis of 6,337,980 units (the
“Underwritten Units”), with each Underwritten Unit consisting of one share of
the Company’s common stock, par value $0.001 per share (“Common Stock”) and a
warrant (each, an “Underwritten Warrant”) to purchase 0.50 of a share of Common
Stock. The public offering price for each Underwritten Unit is $1.45
($1.34125 per Underwritten Unit, net of underwriting discount). In
connection with the Underwriting Agreement, the Company has agreed to pay
LifeTech Capital (a division of Aurora Capital, LLC) financial advisory fees
equal to $161,353, which amount will reduce the total underwriting discounts to
be paid to the Underwriters. Each Underwritten Warrant will have an
exercise price of $1.85 per share, will be exercisable six months after issuance
and will expire five years from the date of issuance. Underwritten
Units will not be issued or certificated. The shares of Common Stock
and the Underwritten Warrants are immediately separable and will be issued
separately, but will be purchased together in the Underwritten
Offering.
The
Underwritten Offering is expected to close on November 19, 2010, contingent upon
the satisfaction of a number of closing conditions, including, but not limited
to, the completion of the concurrent Preferred Offering (as hereinafter defined
and described).
The
shares of Common Stock and the Underwritten Warrants, in each case included in
the Underwritten Units (and the shares of Common Stock issuable from time to
time upon exercise of the Underwritten Warrants) will be issued pursuant to a
prospectus supplement (the “Underwritten Offering Prospectus Supplement”), to be
dated as of November 16, 2010, which is being filed with the Securities and
Exchange Commission (the “Commission”) in connection with a takedown from the
Company’s shelf registration statement on Form S-3 (File No. 333-166169), which
became effective on May 11, 2010, and the base prospectus dated May 19,
2010.
The
Underwriting Agreement provides that the obligations of the Underwriters are
subject to certain conditions precedent and that the Underwriters have agreed,
severally and not jointly, to purchase all of the Underwritten Units sold under
the Underwriting Agreement if any of the Underwritten Units are
purchased. If an Underwriter defaults, the Underwriting Agreement
provides that the purchase commitments of the non-defaulting Underwriters may be
increased or the Underwriting Agreement may be
terminated. Additionally, the Underwriting Agreement contains
customary representations, warranties, and agreements by the Company, customary
conditions to closing, indemnification obligations of the Company and the
Underwriters, including for liabilities under the Securities Act of 1933, as
amended, other obligations of the parties and termination
provisions.
The
foregoing descriptions of the terms of the Underwriting Agreement and the
Underwritten Warrants do not purport to be complete and are subject to, and
qualified in their entirety by reference to, the Underwriting Agreement and the
form of Underwritten Warrant, which are filed herewith as Exhibits 1.1 and 4.1,
respectively, and are incorporated herein by reference. The
provisions of the Underwriting Agreement, including the representations and
warranties contained therein, are not for the benefit of any party other than
the parties to such agreement and are not intended as a document for investors
and the public to obtain factual information about the current state of affairs
of the parties to that document. Rather, investors and the public
should look to other disclosures contained in the Company’s filings with the
Commission.
-2-
Preferred
Offering
On
November 16, 2010, the Company entered into a placement agency agreement (the
“Placement Agent Agreement”) with Cowen and Company, LLC and LifeTech Capital (a
division of Aurora Capital, LLC) (the “Placement Agents”), pursuant to which the
Placement Agents agreed to use their reasonable best efforts to arrange for a
sale (the “Preferred Offering”) (to be conducted concurrently with the
Underwritten Offering) of up to 10,582,011 units (the “Preferred Offering
Units”), with each Preferred Offering Unit consisting of (i) one share
(collectively, the “Preferred Shares”) of Series E 7% Senior Convertible
Preferred Stock, par value $0.01 per share, of the Company (“Series E Preferred
Stock”), (ii) a warrant (collectively, the “Preferred Offering Warrants”) to
purchase 0.25 of a share of Common Stock (or an aggregate of 1,322,486 warrants)
and (iii) 0.0155 of a share of Common Stock (an aggregate of 164,418
shares). Each Preferred Offering Unit was priced at $0.945, or gross
proceeds of $10 million. Each Preferred Offering Warrant will have a
strike price of $2.0874, will become exercisable after six months and will
expire three years after the initial exercise date. Preferred
Offering Units will not be issued or certificated. The Preferred
Shares, Preferred Offering Warrants and the Common Stock are immediately
separable and will be issued separately, but will be purchased together in the
Preferred Offering. The securities included in the Preferred Offering Units
will be issued without restrictive legends.
The
Company has agreed to pay the Placement Agents a commission equal to 7.5% of the
gross proceeds of the sale of Preferred Offering Units in the Preferred
Offering. The Company will also reimburse the Placement Agents for
certain legal and other expenses incurred by them. The Placement
Agents will not receive any commission with respect to the shares of Common
Stock issuable upon conversion or redemption of the Preferred Shares and
exercise of the Preferred Offering Warrants. In no event will the
total amount of compensation paid to the Placement Agents and other securities
brokers and dealers upon completion of the Preferred Offering exceed 8.0% of the
maximum gross proceeds of the Preferred Offering.
On
November 16, 2010, the Company entered into definitive Securities Purchase
Agreements (the “Securities Purchase Agreements”) with each of the investors in
the Preferred Offering (each, a “Purchaser”), pursuant to which such Purchasers
agreed to purchase, and the Company agreed to sell, an aggregate of 10,582,011
Preferred Offering Units. The Stock Purchase Agreement contains
certain covenants applicable to the Company, including limitations on its
ability to incur debt and a negative pledge with respect to its
assets (other than the assets of its Erye Pharmaceutical
subsidiary).
The terms
and conditions of the Series E Preferred Stock are governed by the Certificate
of Designations for the Series E Preferred Stock (the “Certificate of
Designations”), as described in Item 5.03 below.
The
Preferred Offering is expected to close on November 19, 2010, contingent upon
the satisfaction of a number of closing conditions, including, but not limited
to, the completion of the concurrent Underwritten Offering (as described
above).
The
Preferred Shares, the Preferred Offering Warrants and the shares of Common
Stock, in each case included in the Preferred Offering Units (and the shares of Common Stock
issuable upon conversion or redemption of the Preferred Shares and the
Common Stock issuable from time to time upon exercise of the Preferred Offering
Warrants) will be issued pursuant to a prospectus supplement (the “Preferred
Offering Prospectus Supplement”), to be dated as of November 16, 2010, which is
being filed with the Commission in connection with a takedown from the Company’s
shelf registration statement on Form S-3 (File No. 333-166169), which became
effective on May 11, 2010, and the base prospectus dated May 19,
2010.
The
Placement Agent Agreement provides that the obligations of the Placement Agents
and the Purchasers are subject to certain conditions precedent, including the
absence of any material adverse change in the Company’s business and the receipt
of customary legal opinions, letters and certificates. Additionally,
the Placement Agent Agreement contains customary representations, warranties,
and agreements by the Company, customary conditions to closing, indemnification
obligations of the Company and the Placement Agent, including for liabilities
under the Securities Act of 1933, as amended, other obligations of the parties
and termination provisions.
-3-
The
foregoing descriptions of the terms of the Placement Agent Agreement, the
Securities Purchase Agreement and the Preferred Offering Warrants, do not
purport to be complete and are subject to, and qualified in their entirety by
reference to, the Placement Agent Agreement, the Securities Purchase Agreement
and the form of Preferred Offering Warrant, which are filed herewith as Exhibits
1.2, 10.1 and 4.2, respectively, and are incorporated herein by
reference. The provisions of the Placement Agent Agreement and the
Securities Purchase Agreement, including the representations and warranties
contained therein, are not for the benefit of any party other than the parties
to such agreements and are not intended as documents for investors and the
public to obtain factual information about the current state of affairs of the
parties to those documents and agreements. Rather, investors and the
public should look to other disclosures contained in the Company’s filings with
the Commission.
Use of
Proceeds
The Company estimates that the net
proceeds from the concurrent Underwritten Offering and Preferred Offering,
excluding the proceeds, if any, from the exercise of the Underwritten Warrants
and the Preferred Offering Warrants, will be approximately $16.7 million, after
deducting the estimated underwriting discount, placement agent fees, financial
advisory fees and estimated offering expenses payable by the
Company. An aggregate of $2.5 million of the proceeds from the
Preferred Offering will be placed in escrow for a maximum of two and one half (2
1/2) years as security for the Company's obligations under the Certificate of
Designations pertaining to the Preferred Shares.
The Company currently intends to use
the net proceeds of the concurrent Underwritten Offering and Preferred Offering
in connection with the PCT Merger (as defined below), including a $3 million
repayment of indebtedness owed by PCT, associated costs for the growth of the
cord blood and adult stem cell banking, manufacturing and therapeutic business,
expansion of the Company’s business in Asia and completion of the Company’s
Beijing lab, development and acquisition of proprietary stem cell intellectual
property and new technology and expansion of the Company’s business into other
countries. The Company intends to use the remaining net proceeds from
the concurrent Underwritten Offering and Preferred Offering for marketing,
working capital and other general corporate purposes.
Opinion of
Counsel
A copy of
the opinion of Lowenstein Sandler PC relating to the legality of the issuance
and sale of the securities of the Company in each of the Underwritten Offering
and the Preferred Offering is attached as Exhibit 5.1 hereto.
Item
3.03. Material Modification to Rights of Security
Holders.
The
information set forth under Item 5.03 below is incorporated herein by
reference.
Item
5.03. Amendments to Articles of Incorporation or Bylaws; Change in
Fiscal Year.
In
connection with the offering of the Preferred Shares, as described in Item 1.01
above, on November 16, 2010, the Company approved the Certificate of
Designations to designate up to 10,582,011 Preferred Shares. The
following is a summary of the material terms of the Preferred Shares set forth
in the Certificate of Designations.
Each
Preferred Share is entitled to a dividend on the liquidation preference (as
described below) of 7% per annum, payable monthly in cash or in Common Stock
subject to certain conditions. Each Preferred Share enjoys a
liquidation preference of $1.00 per share plus accrued and unpaid
dividends. The Series E Preferred Stock has a maturity date of 30
months after the closing date. Monthly dividend and principal
payments begin on the fourth month after closing, and can be made in stock or
cash at the Company’s option, provided the “Equity Conditions” (described below)
are satisfied or holders of the Preferred Shares agree to waive the Equity
Conditions for that payment period. If the Equity Conditions are not
satisfied, the Company must make payments in cash. All payments made
in stock will be at the VWAP Price (defined below). Payments of
principal or dividends which are made in stock will be made in shares which are
freely tradable (“Payment Shares”). The price of the shares will be
calculated based on 92% of the average of the lowest five VWAPs of the 20
trading days prior to the payment date (the “VWAP Price”). Between 22
and 25 trading days prior to each payment date, the Company will inform holders
what percentage of the upcoming amortization and dividend payment will be made
in cash. Twenty-one trading days prior to each payment date, the
Company will provide holders with freely trading shares valued at the dollar
amount of the stock payment divided by 92% of the prior day’s
VWAP. Eleven trading days prior to each payment date, the Company
will deliver an additional number of shares equal to the positive difference (if
any) between such number of shares previously delivered and the number of shares
valued at the dollar amount of the stock payment divided by the average of 92%
of the five lowest Daily VWAPs during the immediately preceding ten trading
days. The Company and the holders will “true up” the number of shares
based on the five lowest VWAP prices during the previous 20 trading
days.
-4-
The
Company, at its option, may pre-pay the outstanding balance of the Preferred
Shares in full or in part (in increments of no less than $1,000,000) at 115% of
the then outstanding balance, reducing to 110% after twelve months, with notice
of not less than thirty days and adequate opportunity to convert. The
Company may pre-pay a portion of the Preferred Shares in equity provided the
“Equity Conditions” (described below) apply. The Company can pay in
equity no more than 15% multiplied by the total dollar trading volume (using the
daily VWAP) of the Common Stock for the 22 trading days prior to the
notification date for any given amortization and dividend payment or any
pre-payment, so long as the Equity Conditions are satisfied. The
“Equity Conditions” will be satisfied if, on each day of the pricing period, (i)
the Payment Shares are eligible for resale by the holders without restriction,
(ii) the Company’s Common Stock is not suspended from trading on the AMEX Market
or other trading market, (iii) the Payment Shares may be issued in full without
violating any rules of the AMEX Market, (iv) there is no event of default or
Trigger Event (as defined in the Certificate of Designations), (v) the Company
has not provided the holders with material non-public information, (vi) there is
an effective registration statement with respect to the Payment Shares which
complies with all applicable securities laws, (vii) the Company’s transfer agent
is participating in the DTC Fast Automated Securities Transfer Program and
(viii) the Payment Shares will be duly authorized, fully paid and
non-assessable.
The
Preferred Shares will be convertible at an initial conversion price of
$2.0004. The conversion price is subject to adjustment as provided in
the Certificate of Designations. The Preferred Shares and the
associated warrants will have “weighted average” anti-dilution protection, and
will not have voting rights except in certain limited circumstances (as
described in the Certificate of Designations).
The Certificate of
Designations further provides that the total number of shares of Common
Stock issued or issuable to the holders of any Preferred Shares shall not (when
aggregated with any shares of Common Stock already issued in respect of all of
the Preferred Shares) exceed the maximum number of shares of Common Stock which
the Company can so issue pursuant to any rule or regulation of the NYSE Amex (or
any other national securities exchange on which the Company's Common Stock
trades), subject to equitable adjustments from time to time for stock splits,
stock dividends, combinations, capital reorganizations and similar events
relating to shares of the Company's Common Stock occurring after the closing of
the Preferred Offering. In accordance with the provisions of
the Certificate of Designations no shares of Common Stock in excess of 19.9% of
NBS outstanding common stock less the common stock issued in the concurrent
Preferred Offering and Underwritten Offering shall be issued by the Company (x)
under the Preferred Warrants and (y) under the Preferred Shares, whether by
reason of conversion, redemption or otherwise, and no voting rights may be
exercised, until after approval of the Company's stockholders.
-5-
In addition, the
Certificate of
Designations limits the number of shares of the Company's Common
Stock that may be issued to each individual holder of the Preferred Shares such
that the Company may not at any time issue to an individual holder shares
of the Company's Common Stock if the number of shares of Common Stock to be
issued pursuant to such issuance would exceed, when aggregated with all other
shares of the Company's Common Stock beneficially owned by such holder at such
time (as determined in accordance with relevant Exchange Act rules), the number
of shares of Common Stock that would result in the holder beneficially owning
(as determined in accordance with relevant Exchange Act rules) more than 4.9%
(the ‘‘Beneficial Ownership Limitation’’) of the then issued and outstanding
Common Stock. Each holder shall have the right (with respect to itself only) to
(i) waive such ownership cap upon not less than sixty-five (65) days’
prior notice to us; (ii) at any time and from time to time
immediately reduce the Beneficial Ownership Limitation; and (iii) (subject to
waiver) at any time and from time to time, increase the Beneficial Ownership
Limitation immediately in the event of the announcement as pending or planned of
a Change in Control Transaction (as defined in the Certificate of
Designations).
The
Preferred Shares are subject to mandatory repurchase in cash at a premium
depending on the date of repurchase upon certain events, including certain
change in control transactions, payment defaults, and certain breaches of
representations, warranties and covenants.
The
foregoing description of the terms of the Certificate of Designations, does not
purport to be complete and are subject to, and qualified by its entirety by
reference to, the Certificate of Designations, which is filed herewith as
Exhibit 3.1 and is incorporated herein by reference.
Item
8.01. Other Events.
On November 16, 2010, the Company
issued a press release announcing the pricing of the offerings described
above. A copy of the press release is attached hereto as Exhibit 99.1
and is incorporated herein by reference.
Forward-Looking
Statements
Certain statements in this Current
Report on Form 8-K are forward-looking statements that involve a number of risks
and uncertainties. Such forward-looking statements include statements
about the expected settlement of the sale and purchase of securities described
herein and the Company’s receipt of net proceeds therefrom. For such
statements, the Company claims the protection of the Private Securities
Litigation Reform Act of 1995. Actual events or results may differ
materially from the Company’s expectations. Factors that could cause
actual results to differ materially from the forward-looking statements include,
but are not limited to, the Company’s ability to satisfy applicable closing
conditions under the Underwriting Agreement, the Placement Agent Agreement and
the Securities Purchase Agreement. Additional factors that could
cause actual results to differ materially from those stated or implied by the
Company’s forward-looking statements are disclosed in the Preferred Offering
Prospectus Supplement, the Underwritten Offering Prospectus Supplement and the
Company’s reports filed with the Securities and Exchange
Commission.
This
Current Report on Form 8-K may be deemed to be solicitation material in respect
of the proposed Merger with Progenitor Cell Therapy, LLC. The
directors and executive officers of each of NeoStem and PCT may be deemed to be
participants in the solicitation of proxies from the holders of NeoStem Common
Stock in respect of the proposed transaction. Information about the
directors and executive officers of NeoStem is set forth in NeoStem’s Definitive
Proxy Statement on Schedule 14A filed with the SEC on April 30, 2010 in
connection with its June 2010 Annual Meeting of Stockholders. Investors may
obtain additional information regarding NeoStem and its directors and executive
officers, and PCT and its Board of Managers and executive officers, in
connection with the proposed Merger by reading the S-4 and the prospectus/joint
proxy statement contained therein, when it becomes available. The S-4
will contain a prospectus/joint proxy statement pertaining to (a) the special
meeting of stockholders of NeoStem at which NeoStem’s stockholders will be asked
to approve the NeoStem securities issuable in the Merger and (b) the special
meeting of Members of PCT at which PCT's Members will be asked to approve the
Merger Agreement and Merger.
-6-
Item
9.01. Financial Statements and Exhibits.
(d) Exhibits.
The
following exhibits are filed with this Current Report on Form 8-K:
Exhibit
No.
|
Description
|
|
1.1
|
Underwriting
Agreement, dated November 16, 2010, by and between NeoStem, Inc. and Cowen
and Company, LLC
|
|
1.2
|
Placement
Agent Agreement, dated November 16, 2010, by and between NeoStem, Inc. and
Cowen and Company, LLC (as representative for the placement
agents)
|
|
3.1
|
Certificate
of Designations for the Series E 7% Senior Convertible Preferred
Stock
|
|
4.1
|
Form
of Underwritten Warrant
|
|
4.2
|
Form
of Preferred Offering Warrant
|
|
5.1
|
Opinion
of Lowenstein Sandler PC
|
|
10.1
|
Securities
Purchase Agreement, dated November 16, 2010, by and among NeoStem, Inc.,
JGB Management Inc. and certain Purchasers
|
|
10.2
|
Escrow
Agreement with Wells Fargo Bank, National Association, to be executed at
closing
|
|
23.1
|
Consent
of Lowenstein Sandler PC (included in Opinion of Lowenstein Sandler PC
filed as Exhibit 5.1)
|
|
99.1
|
Press
release of NeoStem, Inc., dated November 16,
2010
|
-7-
SIGNATURE
Pursuant to the requirements of the
Securities Exchange Act of 1934, the Company has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
NEOSTEM, INC. | |||
|
By:
|
/s/ Catherine M. Vaczy | |
Name: Catherine M. Vaczy | |||
Title: Vice President and General Counsel |
Dated: November
16, 2010
-8-