UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Item 1.01. Entry into a Material Definitive Agreement
Asset Purchase Agreement
On April 18, 2023, Aditxt, Inc. (the “Company”) entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Cellvera Global Holdings LLC (“Cellvera Global”), Cellvera Holdings Ltd. (“BVI Holdco”), Cellvera, Ltd. (”Cellvera Ltd.”), Cellvera Development LLC (“Cellvera Development” and together with Cellvera Global, BVI Holdco, Cellvera Ltd. and Cellvera Development (the “Sellers”), AiPharma Group Ltd. (“Seller Owner” and collectively with the Sellers, “Cellvera”), and the legal representative of Cellvera, pursuant to which, the Company will purchase Cellvera’s 50% ownership interest in G Response Aid FZE (“GRA”), certain other intellectual property and all goodwill related thereto (the “Acquired Assets”). Unless expressly stated otherwise herein, capitalized terms used but not defined herein have the meanings ascribed to them in the Asset Purchase Agreement. Pursuant to the Asset Purchase Agreement, the consideration for the Acquired Assets consists of (A) $24.5 million, comprised of: (i) the forgiveness of the Company’s $14.5 million loan to Cellvera Global, and (ii) approximately $10 million in cash, and (B) future revenue sharing payments for a term of seven years. GRA holds an exclusive, worldwide license for the antiviral medication, Avigan® 200mg, excluding Japan, China and Russia. The other 50% interest in GRA is held by Agility, Inc. (“Agility”).
Additionally, upon the closing, the Share Exchange Agreement previously entered into as of December 28, 2021, between Cellvera Global Holdings, LLC f/k/a AiPharma Global Holdings, LLC (together with other affiliates and subsidiaries) and the Company, and all other related agreements will be terminated.
Representations and Warranties
The parties to the Asset Purchase Agreement have agreed to customary representations and warranties for transactions of this type.
Closing Conditions
The obligations of the Company to consummate the Closing are subject to the satisfaction or waiver, at or prior to the Closing of certain conditions, including but not limited to, the following:
| (i) | Satisfactory completion of due diligence; | |
| (ii) | Completion by the Company of financing sufficient to consummate the transactions contemplated by the Asset Purchase Agreement; | |
| (iii) | Receipt by the Company of all required Consents from Governmental Bodies for the Acquisition, including but not limited to, any consents required to complete the transfer and assignment of Cellvera’s membership interests in GRA; | |
| (iv) | Receipt of executed payoff letters reflecting the amount required to be fully pay all of each of Seller’s and Seller Owner’s Debt to be paid at Closing; | |
| (v) | Receipt by the Company of a release from Agility; | |
| (iv) | Execution of an agreement acceptable to the Company with respect to the acquisition by the Company of certain intellectual property presently held by a third party; | |
| (v) | Execution of an amendment to an asset purchase agreement previously entered into by Cellvera with a third party that effectively grants the Company the rights to acquire the intellectual property from the third party under such agreement; | |
| (vi) | Receipt of a fairness opinion by the Company with respect to the transactions contemplated by the Asset Purchase Agreement; and | |
| (vii) | Receipt by the Company from the Seller Owner of written consent, whether through its official liquidator or the Board of Directors of Seller Owner, to the sale and purchase of the Acquired Assets and Assumed Liabilities pursuant to the Assert Purchase Agreement. |
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Closing
The Closing shall take place within the second (2nd) Business Day following satisfaction or waiver (to the extent permitted by applicable law) of each of the conditions set forth above, or such other date as agreed by the Parties.; provided, that the Parties agree that the Closing must occur before May 31, 2023 (the “Expiration Date”).
Termination
The Asset Purchase Agreement may be terminated at any time prior to the consummation of the Closing by mutual written consent of the Company and Cellvera. The Company may also terminate the Asset Purchase Agreement if by giving written notice to Cellvera at any time prior to the Closing: (i) if Cellvera has breached any covenant, representation or warranty in any material respect contained in the Asset Purchase Agreement; (ii) if the Closing shall not have occurred on or before the Expiration Date; (iii) if the Company is unsatisfied (in its sole discretion) with the contents of the disclosure schedules; or (iv) the Company is not satisfied (in its sole discretion) with its diligence review which shall be ongoing through and including the Expiration Date.
Effect of Termination
If the Asset Purchase Agreement is validly terminated, the Asset Purchase Agreement will become void, and there will be no liability under the Asset Purchase Agreement on the part of any party thereto.
A copy of the Asset Purchase Agreement is filed with this Current Report on Form 8-K as Exhibit 2.1 and is incorporated herein by reference. The foregoing description of the Asset Purchase Agreement and the transactions contemplated thereby is incomplete and is subject to, and qualified in its entirety by, reference to the actual agreement. The Asset Purchase Agreement and other agreements described below have been included as exhibits to this Current Report on Form 8-K to provide security holders with information regarding their terms. They are not intended to provide any other factual information about the parties thereto. In particular, the assertions embodied in representations and warranties by the Company and each Seller and Seller Owner contained in the Asset Purchase Agreement were made as of a specified date, are subject to important qualifications and limitations agreed to by the parties in connection with negotiating such agreement, including being qualified by confidential information in the disclosure letters provided by the parties in connection with the execution of the Asset Purchase Agreement, and are subject to standards of materiality applicable to the contractive parties that may differ from those applicable to security holders. The confidential disclosures contain information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the Asset Purchase Agreement. Moreover, certain representations and warranties in the Asset Purchase Agreement were used for the purpose of allocating risk between the parties, rather than establishing matters as facts. Accordingly, security holders should not rely on the representations and warranties in the Asset Purchase Agreement as characterizations of the actual state of facts about the Company or Cellvera. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Asset Purchase Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information relating to the Note (as defined below) and Loan Agreement (as defined below) included in Item 8.01 is incorporated by reference in this item to the extent required.
Item 7.01. Regulation FD Disclosure.
On April 20, 2023, the Company issued a press release announcing the execution of the Asset Purchase Agreement. A copy of the press release is furnished hereto as Exhibit 99.1 and incorporated in this Item 7.01 by reference.
The information in this Item 7.01 and Exhibit 99.1 will not be deemed to be filed for purposes of Section 18 of the Exchange Act or otherwise be subject to the liabilities of that section, nor will it be deemed to be incorporated by reference in any filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such filing. The submission of the information set forth in this Item 7.01 shall not be deemed an admission as to the materiality of any information in this Item 7.01, including the information presented in Exhibit 99.1, that is provided solely in connection with Regulation FD.
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Item 8.01 Other Events
On April 21, 2023, Amro Albanna, the Chief Executive Officer of the Company, and Shahrokh Shabahang, the Chief Innovation Officer of the Company, loaned $87,523.89 and $100,000.00, respectively, to the Company. The loans were evidenced by an unsecured promissory note (the “Note”). Pursuant to the terms of the Note, it will accrue interest at the Prime rate of eight percent (8.0%) per annum and is due on the earlier of October 20, 2023, 2023 or an event of default, as defined therein.
The foregoing summary of the Note is qualified in its entirety by reference to the text of the form of Note, a copy of which is filed as an exhibit hereto and incorporated by reference herein.
On April 24, 2023, the Company entered into a Business Loan and Security Agreement (the “Loan Agreement”) with a commercial funding source (the “Lender”), pursuant to which the Company obtained a loan from the Lender in the principal amount of $1,060,000, which includes origination fees of $60,000 (the “Loan”). Pursuant to the Loan Agreement, the Company granted the Lender a continuing secondary security interest in certain collateral (as defined in the Loan Agreement). The total amount of interest and fees payable by the Company to the Lender under the Loan (the “Repayment Amount”) will be $1,590,000 and will be repaid in 20 weekly installments of $79,500.
The foregoing description of the Loan Agreement is not complete and is qualified in its entirety by reference to the full text of the Loan Agreement, a copy of which is filed as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated by reference herein.
As previously reported, on September 28, 2022, the Company received the determination from The Nasdaq Stock Market LLC (“Nasdaq”) that the Company has regained compliance with the requirements to remain listed in The Nasdaq Capital Market subject to a Panel Monitor of the Company’s ongoing compliance with such requirements as set forth in Listing Rule 5815(d)(4)(A) until March 28, 2023. On April 24, 2023, the Company received notice from Nasdaq that, pursuant to its discretion under Listing Rule 5815(c)(4) that it was extending the Panel Monitor until September 28, 2023, as a result of the Company’s stock price falling below the minimum bid price requirement in Nasdaq Listing Rule 5550(a)(2) during the monitor period. If, within that monitoring period, the Listing Qualifications staff (“Staff”) finds the Company out of compliance with one or more listing standards during that period notwithstanding Rule 5810(c)(2), the Company will not be permitted to provide the Staff with a plan of compliance with respect to that deficiency and Staff will not be permitted to grant additional time for the Company to regain compliance with respect to that deficiency, nor will the company be afforded an applicable cure or compliance period pursuant to Rule 5810(c)(3). Instead, Staff will issue a Staff Delist Determination and the Company will have an opportunity to request a new hearing with the initial Hearings Panel or a newly convened Hearings Panel if the initial Hearings Panel is unavailable. The Company will have the opportunity to respond/present to the Hearings Panel as provided by Listing Rule 5815(d)(4)(A). If the hearing is unsuccessful, the Company’s securities may be at that time delisted from Nasdaq.
Cautionary Note on Forward-Looking Statements
This Current Report on Form 8-K contains certain forward-looking statements within the meaning of the “safe harbor “provisions under the United States Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this Current Report on Form 8-K, including statements regarding the Company’s or Cellvera’s future results of operations and financial position are forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “target,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. These statements are based on various assumptions, whether or not identified in this Current Report on Form 8-K, and on the current expectations of the respective management teams of the Company and Cellvera and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by an investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of the Company and Cellvera.
These forward-looking statements are subject to a number of risks including, but not limited to, the following risks relating to the proposed transactions: (1) the risk that the proposed transactions may not be completed in a timely manner or at all, which may adversely affect the price of the Company’s securities; (2) the failure to satisfy the conditions to the Closing, including but not limited to, the Company’s ability to secure the required funds to finance the purchase price; the receipt of all required consents and releases; the Company’s ability to secure certain additional intellectual property rights from a third party; and the satisfactory satisfaction of all creditors of Cellvera; (3) the ability to realize the anticipated benefits of the proposed transactions; and (4) other risks and uncertainties indicated from time to time in the Company’s public filings with the SEC. If any of these risks materialize or the Company’s and Cellvera’s assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. You should carefully consider the risks and uncertainties described in the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and other documents we filed, or will file, including the proxy statement/prospectus, with the SEC. There may be additional risks that neither the Company nor Cellvera presently know, or that the Company or Cellvera currently believe are immaterial, that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect the Company’s and Cellvera’s expectations, plans or forecasts of future events and views as of the date of this Current Report on Form 8-K. The Company and Cellvera anticipate that subsequent events and developments will cause the Company’s and Cellvera’s assessments to change. However, while the Company and Cellvera may elect to update these forward-looking statements at some point in the future, the Company and Cellvera specifically disclaim any obligation to do so, except as otherwise required by law. These forward-looking statements should not be relied upon as representing the Company’s and Cellvera’s assessments of any date subsequent to the date of this Current Report on Form 8-K. Accordingly, undue reliance should not be placed upon the forward-looking statements.
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Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Exhibit | |
| 2.1 † | Asset Purchase Agreement dated as of April 19, 2023 by and between the Company and Cellvera, Ltd., et al. | |
| 10.1 | Form of Unsecured Promissory Note | |
| 10.2 | Form of Business Loan and Security Agreement, dated April 24, 2023 | |
| 99.1 | Press Release, dated April 20, 2023. | |
| 104 | Cover Page Interactive Data File (embedded within the XBRL document) |
| † | Certain of the schedules (and/or exhibits) have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule (and/or exhibit) will be furnished to the SEC upon request |
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SIGNATURE
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.
| Aditxt, Inc. | ||
| Date: April 25, 2023 | By: | /s/ Amro Albanna |
| Name: | Amro Albanna | |
| Title: | Chief Executive Officer, and Chairman | |
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