Item 1.01.
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Entry into a Material Definitive Agreement
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On May 29, 2018, Cryo-Cell International, Inc.
(Cryo-Cell) entered into a definitive Asset Purchase Agreement (the Purchase Agreement) with Cord:Use Cord Blood Bank, Inc., a Florida corporation (Seller), pursuant to which it has agreed, subject to the closing
conditions contained therein, to purchase substantially all of Sellers assets, including without limitation Sellers inventory of public cord blood units existing as of the closing date (the Public Cord Blood Inventory) and
Sellers shares of common stock of Tianhe Stem Cell Biotechnologies, Inc., an Illinois corporation (the Tianhe Capital Stock). Seller is in the business of public and private cord blood and tissue, collection, processing, storage
and banking.
The aggregate consideration payable at closing under the Purchase Agreement is $14,000,000, with $10,500,000 payable in cash and the
balanced being paid through the delivery to Seller of 470,430 shares of Cryo-Cells common stock, par value $0.01 per share (Common Stock), at $7.44 per share. To help fund the cash portion of the purchase price, Cryo-Cell currently
is negotiating a $9,000,000 increase to its existing credit facility with Texas Capital Bank, which it intends to close simultaneously with the closing of the acquisition. In addition, Cryo-Cell is assuming certain limited liabilities incurred by
Seller in connection with its business that remain unpaid as of the closing date and that directly relate to the services to be provided after Closing by Cryo-Cell. Cryo-Cell is also assuming certain of Sellers contracts and the obligations
arising therefrom after the closing date.
Furthermore, Seller is entitled to an earnout from Cryo-Cells sale of the Public Cord Blood Inventory
from and after closing in excess of certain thresholds, payable in cash and/or additional shares of Common Stock, on the terms set forth in the Purchase Agreement. Additionally, in certain circumstances further described in the Purchase Agreement,
Seller is entitled to a portion of the gross profits generated, or deemed to have been generated, by Cryo-Cell from its ownership of the Tianhe Capital Stock.
The shares of Common Stock will be issued to Seller in a private transaction exempt from the registration requirements of the Securities Act of 1933 (the
Securities Act) under Section 4(a)(2) of the Securities Act.
The closing of the transactions contemplated by the Purchase Agreement,
which is expected to occur by June 11, 2018, is subject to satisfaction of customary closing conditions, including the approval of the transaction by Sellers shareholders, as set forth in with the Purchase Agreement. There can be no
assurances that all such conditions will be met. The Purchase Agreement also contains representations and warranties and covenants which are believed to be customary for transactions of this type.
The Purchase Agreement has been approved by the Board of Directors of Cryo-Cell and Seller.
The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the complete text of the
Purchase Agreement, a copy of which is filed as Exhibit 2.1 to this current report on Form
8-K
and the information contained therein is incorporated herein by reference.
The Purchase Agreement has been included to provide readers with information regarding its terms. It is not intended to provide any other financial
information about Cryo-Cell, Seller, or their respective subsidiaries and affiliates. The representations, warranties and covenants contained in the Purchase Agreement were made only for purposes of that agreement and as of specific dates; are
solely for the benefit of the parties to the Purchase Agreement; may be subject to limitations agreed upon by the parties, including being qualified by disclosures made for the purposes of allocating contractual risk between the parties to the
Purchase Agreement instead of establishing these matters as facts; and may be subject to standards of materiality applicable to the contracting parties. Readers should not rely on the representations, warranties and covenants or any description
thereof as characterizations of the actual state of facts or condition of Cryo-Cell or Seller or any of their respective subsidiaries or affiliates.