Item 1.01 Entry into a Material Definitive Agreement.
On June 13, 2014
, Brainstorm Cell Therapeutics Inc.
, a Delaware
"Company"), entered into a securities purchase agreement (the "Securities
Purchase Agreement") with a group of investors, including several
healthcare-focused funds (the "Investors") to effect a private placement (the
"Offering") of the Company's common stock, $0.00005
par value per share ("Common
Stock"), and warrants to purchase Common Stock. Upon the closing of the
Offering, the Company will receive gross proceeds of approximately $10.5
, resulting from the issuance and sale of approximately 42 million shares
of Common Stock (the "Shares") at a price per share of $0.25
, a 15% discount to
the 30 day volume-weighted average price of $0.294
. The Investors will also
receive warrants to purchase up to approximately 42 million shares of Common
Stock at an exercise price of $0.348
per share (the "Warrants"). The Warrants
are exercisable immediately upon closing of the private placement and have a
term of three (3) years.
The Offering, which is expected to close on or about June 18, 2014
Date"), is subject to the satisfaction of certain customary closing conditions
contained in the Securities Purchase Agreement. In connection with the Offering,
the Company will enter into a Registration Rights Agreement (the "Registration
Rights Agreement") at closing pursuant to which the Company will file a resale
registration statement for the Shares and Common Stock underlying the Warrants
within 30 days of the Closing Date (the "Filing Deadline") and have it declared
effective at the earlier of (i) the 90th calendar day after the Closing Date and
(ii) the fifth business day after the date the Company is notified by the SEC
that such Registration Statement will not be reviewed or will not be subject to
further review (the "Effectiveness Deadline"). The Registration Rights Agreement
contains penalties for failure to comply with the terms of the agreement,
including monthly liquidated damages in an amount equal to 1.5% of the aggregate
subscription amount for failure to meet the Effectiveness Deadline, up to a
maximum of 12% of the aggregate subscription amount.
If at any time all of the shares of Common Stock or shares of Common Stock
underlying the Warrants are not covered by the initial Registration Statement,
the Company agrees to file with the SEC
one or more additional Registration
Statements so as to cover all of the shares of Common Stock and shares of Common
Stock underlying the Warrants not covered by such initial Registration
Statement, in each case, as soon as practicable, but in no event later than the
applicable filing deadline for such additional Registration Statements as
provided in the Registration Rights Agreement.
The Company intends to use the aggregate net proceeds of the Offering primarily
for working capital and general corporate purposes, including the Company's
recently launched phase 2 amyotrophic lateral sclerosis clinical trial.Maxim Group LLC
acted as sole placement agent for the Offering (the "Placement
Agent"). In connection with the Offering, the Company has agreed to pay the
Placement Agent a cash fee equal to 6.9% of the gross proceeds of the Offering,
as well as fees and expenses of the Placement Agent of $35,000
. In addition, the
Company will issue to the Placement Agent a 5-year warrant to purchase up to
1,260,000 shares of Common Stock (equal to 3% of the number of shares sold in
the Offering), with an exercise price equal to $0.30
(120% of the offering
The Securities Purchase Agreement contains provisions that restrict the Company
from issuing, except in certain cases, any Common Stock or Common Stock
equivalents in the first 90 days following the closing of the Offering.
On June 13, 2014
, the Company issued a press release announcing the pricing of
the Offering. A copy of the press release is attached as Exhibit 99.1 hereto.
The form of Securities Purchase Agreement, the form of Warrant, and the form of
Registration Rights Agreement are filed as Exhibits 10.1, 10.2 and 10.3,
respectively, to this Current Report on Form 8-K. The foregoing descriptions of
Securities Purchase Agreement, Warrant, Registration Rights Agreement do not
purport to be complete and are qualified in their entirety by reference to the
Exhibits 10.1, 10.2 and 10.3 hereto which are incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
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.June 13, 2014Brainstorm Cell Therapeutics Inc.
By: /s/ Anthony FiorinoAnthony Fiorino
Chief Executive Officer