Current Report Filing (8-k)
November 16 2017 - 6:07AM
Edgar (US Regulatory)
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
13, 2017
ORGENESIS INC.
(Exact name of registrant as specified in its charter)
Nevada
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000-54329
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98-0583166
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(State or other
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(Commission File
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(IRS Employer
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jurisdiction
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Number)
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Identification No.)
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of incorporation
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20271 Goldenrod Lane, Germantown, MD 20876
(Address of principal executive offices) (Zip Code)
Registrants telephone number, including area code:
(480)
659-6404
Not Applicable
(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:
[ ] Written communications pursuant to Rule 425
under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to
Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to
Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging
growth company as defined in in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b
-2 of this chapter).
Emerging growth company [ ]
If an emerging growth company, indicate by checkmark if the
registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to
Section 13(a) of the Exchange Act. [ ]
Item 1.01 Entry into a Material Definitive Agreement
On
November 15, 2017, Orgenesis Inc. (the Company), MaSTherCell S.A., the
Companys wholly-owned Belgian-based subsidiary (MaSTherCell) and the Belgian
Sovereign Funds Société Fédérale de Participations et d'Investissement (SFPI)
entered into a Subscription and Shareholders Agreement (the Agreement)
pursuant to which SFPI is making an equity investment in MaSTherCell in the
aggregate amount of €5million (approximately $5.9 million), for approximately
16.7% of MaSTherCell. The equity investment commitment includes the conversion
of the currently outstanding loan of €1 million (approximately $1.1 million)
plus accrued interest in the approximate amount of €70 thousand (approximately
$77,000), previously made by SFPI to MaSTherCell (the Loan Amount).
Under
the Agreement, an initial subscription amount of €2 million (approximately $2.3
million) has been paid and the outstanding Loan Amount been converted. The
balance of approximately €2 million is payable as needed by MaSTherCell and
called in by the board of directors of MaSTherCell. The proceeds of the
investment will be used to expand MaSTherCells facilities in Belgium by the
addition of five new cGMP manufacturing cleanrooms. This expansion will position
MaSTherCell as the European hub for the Companys continental activities and
strengthen its leading position in cell and gene manufacturing. The
state-of-the-art design enables MaSTherCell to offer full flexibility for
production and process development.
Under
the Agreement, SFPI will be represented by one board member of the five board
members of MaSTherCell. In addition, SFPI is entitled to designate one
independent board member to the MaSTherCell board who is acceptable to the
Company. The Agreement provides that, under certain specified circumstances
where MaSTherCell breaches the terms of the Agreement, SFPI is entitled to put
its equity interest in MaSTherCell to the Company at a price equal to the
subscription price paid by SFPI, plus a specified annual premium ranging from
10% to 25%, depending on the year following the subscription in which the put is
exercised. If the Company elects to terminate the Agreement before its scheduled
term of seven years (or to not renew the agreement upon its scheduled
termination), SFPI is entitled to put its MaSTherCell equity interest to the
Company at fair market value (as determined by SFPI and the Company).
Additionally, at any time during the first three years following the investment,
SFPI is entitled to exchange its equity interest in MaSTherCell into shares of
the Companys common stock par value $0.0001 per share (the Common Stock), at
a rate equal to the subscription price paid by SFPI divided by $0.52 (subject to
adjustment for certain capital events, such as stock splits).
The
Agreement contains customary representations, warranties and covenants by
MaSTherCell, in respect of which the Company has undertaken to indemnify SFPI
for the consequences of any breach thereof by MaSTherCell.
Item 3.03 Material Modification to Rights of Security
Holders.
Effective
November 13, 2017, the Company filed a Certificate of Change to the Articles of
Incorporation of the Company (the Amendment) to effectuate a reverse stock
split of the Companys Common Stock, at a ratio of 1-for-12 (the Reverse Stock
Split). The Board of Directors of the Company previously approved the Reverse
Stock Split.
Reason for the Reverse Stock Split
The
Reverse Stock Split is being implemented by the Company in connection with an
application filed to up-list the Companys common stock on the NASDAQ Capital
Market (NASDAQ). The Reverse Stock Split is intended to fulfill the stock
price requirements for listing on NASDAQ since the requirements include, among
other things, that the Companys common stock must maintain a minimum per share price of $4.00 or higher for a specified period that
will be required by NASDAQ. There is no assurance that the Companys application
to up-list the Companys common stock on NASDAQ will be approved.
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Effective Date; Symbol
The
Reverse Stock Split becomes effective with FINRA (the Financial Industry
Regulatory Authority) and in the marketplace at the open of business on November
16, 2017 (the Effective Date), whereupon the shares of common stock will begin
trading on a split-adjusted basis. On the Effective Date, the Companys trading
symbol will change to ORGSD for a period of 20 business days, after which the
D will be removed from the Companys trading symbol, which will revert to the
original symbol of ORGS.
Split Adjustment; No Fractional Shares
On
the Effective Date, the total number of shares of the Companys Common Stock
held by each stockholder will be converted automatically into the number of
whole shares of Common Stock equal to (i) the number of issued and outstanding
shares of Common Stock held by such stockholder immediately prior to the Reverse
Stock Split, divided by (ii) 12. No fractional shares will be issued, and no
cash or other consideration will be paid. Instead, the Company will issue one
whole share of the post-Reverse Stock Split Common Stock to any stockholder who
otherwise would have received a fractional share as a result of the Reverse
Stock Split.
Non-Certificated Shares; Certificated Shares
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Stockholders
who are holding their shares in electronic form at brokerage firms do not have
to take any action as the effect of the Reverse Stock Split will automatically
be reflected in their brokerage accounts. Stockholders holding paper
certificates may (but are not required to) send the certificates to the
Companys transfer agent. The transfer agent will issue a new share certificate
reflecting the terms of the Reverse Stock Split to each requesting stockholder.
No Stockholder Approval Required
Under
Nevada law, because the Reverse Stock Split was approved by the Board of
Directors of the Company in accordance with NRS Section 78.207, no stockholder
approval is required. NRS Section 78.207 provides that the Company may effect
the Reverse Stock Split without stockholder approval if (x) both the number of
authorized shares of Common Stock and the number of outstanding shares of Common
Stock are proportionally reduced as a result of the Reverse Stock Split (y) the
Reverse Stock Split does not adversely affect any other class of stock of the
Company and (z) the Company does not pay money or issue scrip to stockholders
who would otherwise be entitled to receive a fractional share as a result of the
Reverse Stock Split. As described herein, the Company has complied with these
requirements.
Immediately
after the Reverse Stock Split, each stockholders percentage ownership interest
in the Company and proportional voting power will remain virtually unchanged
except for minor changes and adjustments that will result from rounding
fractional shares into whole shares. The rights and privileges of the holders of
shares of Common Stock will be substantially unaffected by the Reverse Stock
Split. All options, warrants and convertible securities of the Company
outstanding immediately prior to the Reverse Stock Split will be appropriately
adjusted by dividing the number of shares of Common Stock into which the
options, warrants and convertible securities are exercisable or convertible by 12 and multiplying the exercise or conversion price thereof
by 12, as a result of the Reverse Stock Split.
3
The
above description of the Amendment does not purport to be complete and is
qualified in its entirety by reference to the Amendment, which is attached
hereto as Exhibit 3.1 to this Current Report on Form 8-K.
Item 5.03 Amendments to Articles of Incorporation or Bylaws;
Change in Fiscal Year.
The
information required by this Item 5.03 is set forth in Item 3.03 above, which is
incorporated herein by reference.
Item 8.01 Other Items.
Between
June 5, 2017 and November 14, 2017, the Company raised from a combination of
accredited and off shore investors an aggregate of $4.3 million, of which $2.3
million represent two year loans convertible into units of the Companys
securities, with each unit comprised of one share at a deemed conversion price
of $0.52 (subject to adjustment for certain capital events, such as stock
splits) and one Common Stock purchase warrant to purchase an additional share of
Common Stock exercisable for a three-year period from the date of conversion at
a per share exercise price of $0.52 (subject to adjustment for certain capital
events, such as stock splits).
The
loans have a mandatory conversion provision whereby the outstanding amounts are
converted into the Companys Common Stock at a fixed rate of $0.52 per shares
(subject to adjustment for certain capital events, such as stock splits) upon
the earlier to occur of any of the following: (i) the closing of an offering of
equity securities of the Company with gross proceeds to the Company greater than
$10 million (ii) the trading of the Companys Common Stock on the over-the
counter market or an exchange at a weighted average price of at least $0.52
(adjusted for certain capital events such as stock splits) for fifty (50)
consecutive trading days, or (iii) the listing of the Companys Common Stock on
a U.S. National Exchange.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
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SIGNATURES
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.
ORGENESIS INC.
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By:
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/s/ Neil
Reithinger
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Neil Reithinger
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Chief Financial Officer, Treasurer and Secretary
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November 16, 2017
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