UNITED
STATES
SECURITIES AND
EXCHANGE COMMISSION
WASHINGTON, DC
20549
___________________
FORM 8-K
CURRENT
REPORT
Pursuant to Section 13 or 15(d) of
the
Securities Exchange Act of
1934
Date of Report: November 16,
2020
(Date of earliest event
reported)
BIORESTORATIVE THERAPIES,
INC.
(Exact Name of Registrant as
Specified in Charter)
Registrant's telephone number,
including area code: (631) 760-8100
Securities registered pursuant to Section 12(b) of the
Act:
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:
Indicate by
check mark whether the registrant is an emerging growth company as
defined 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 x
If an emerging growth company,
indicate by check mark 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.
Chapter 11 Filing
As previously disclosed, on March 20, 2020 (the “Petition Date”), BioRestorative
Therapies, Inc. (the “Company”) filed a voluntary petition
commencing a case under chapter 11 of title 11 of the U.S. Code
(the “Chapter 11 Case”) in
the United States Bankruptcy Court for the Eastern District of New
York (the “Bankruptcy
Court”).
Effectiveness of Amended Joint Plan of Reorganization
As previously disclosed, on August 7, 2020, the Company and Auctus
Fund, LLC (“Auctus”), the
Company’s largest unsecured creditor, and a shareholder, as of the
Petition Date, filed an Amended Joint Plan of Reorganization of
BioRestorative Therapies, Inc. and Auctus Fund, LLC, dated August
7, 2020 (the “Plan”), and
on October 30, 2020, the Bankruptcy Court entered an order (the
“Confirmation Order”)
confirming the Plan, as amended. Amendments to the Plan are
reflected in the Confirmation Order. On November 16, 2020
(the “Effective Date”), the
Plan became effective.
Pursuant to the Plan, as amended and confirmed by the Confirmation
Order, the following has occurred:
(i) Auctus
has provided $3,500,000 in funding to the Company (the
“Initial Auctus Funding”)
and is to provide, subject to certain conditions, additional
funding to the Company in an amount equal to $3,500,000, less the
sum of the debtor-in-possession loans made to the Company by Auctus
during the Chapter 11 Case (inclusive of accrued interest)
(the “DIP Obligation”)
(approximately $1,200,000 as of the Effective Date) and the costs
incurred by Auctus as the debtor-in-possession lender (the
“DIP Costs”). In
addition, four other persons and entities (collectively, the
“Other Lenders”) who held
allowed general unsecured claims have provided funding to the
Company in the aggregate amount of approximately $348,000 (the
“Other Funding” and
together with the Initial Auctus Funding, the “Funding”). In consideration of
the Funding, the Company has issued the following:
(a) secured
convertible promissory notes of the Company (each, a “Secured Convertible Note”) in the
principal amount equal to the Funding (110% of the Funding in the
case of Auctus); the payment of the Secured Convertible Notes shall
be secured by the grant of a security interest in substantially all
of the Company’s assets; the Secured Convertible Notes have the
following features:
(b) warrants
(each, a “Class A Warrant”)
to purchase a number of shares of Common Stock equal to the amount
of the Funding provided divided by $0.0005 (a total of
7,000,000,000 Class A Warrants in consideration of the Initial
Auctus Funding and a total of approximately 697,000,000 Class A
Warrants in the aggregate in consideration of the Other Funding),
such Class A Warrants having an exercise price of $0.0005 per
share; and
(c) warrants
(each, a “Class B Warrant”
and together with the Class A Warrants, the “Plan Warrants”) to purchase a number of
shares of Common Stock equal to the Funding provided divided by
$0.001 (a total of 3,500,000,000 Class B Warrants in consideration
of the Initial Auctus Funding and a total of approximately
348,500,000 Class B Warrants in the aggregate in consideration of
the Other Funding), such Class B Warrants having an exercise price
of $0.001 per share.
(ii) Auctus’
DIP Obligation has been exchanged for the following:
(a) a
Secured Convertible Note in the principal amount of approximately
$1,349,591
(110% of
the DIP Obligation);
(b) a
Class A Warrant to purchase 2,453,802,480 shares of Common Stock;
and
(c) a
Class B Warrant to purchase 1,226,901,240 shares of Common Stock
(as to which 84,344,369 shares of Common Stock have been exercised
on a net exercise basis, pursuant to the terms of the Class B
Warrant, with respect to the issuance of 81,796,200 shares of
Common Stock).
In addition, Auctus shall be entitled to receive a Secured
Convertible Note, a Class A Warrant and a Class B Warrant in
exchange for its allowed DIP Costs and allowed Plan costs in a
manner in which the DIP Obligation was treated.
(iii) The
claim arising from the secured promissory notes of the Company,
dated February 20, 2020 and February 26, 2020, in the original
principal amounts of $320,200.49 and $33,561.50, respectively,
issued to John Desmarais (“Desmarais”) (collectively, the
“Desmarais Notes”),
is being treated as an allowed secured claim in the aggregate
amount of $490,698.81 and is being exchanged for a Secured
Convertible Note in such amount.
(iv) The
claim arising from the promissory note issued in July 2017 by the
Company to Desmarais in the original principal amount of $175,000
is being treated as an allowed general unsecured claim in the
amount of $245,191.78 and is being satisfied and exchanged for
24,519,200 shares of Common Stock.
(v) The
claim arising from the promissory note issued in June 2016 by the
Company to Tuxis Trust, an entity related to Desmarais, in the
original principal amount of $500,000 is being treated as
follows:
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(a) |
$444,534.43 is being treated as an allowed general unsecured claim
in such amount and exchanged for 44,453,400 shares of Common Stock;
and;
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(b) |
$309,301.19 is being treated as an
allowed secured claim in such amount and exchanged for a Secured
Convertible Note in such amount.
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(vi) Holders
of allowed general unsecured claims (other than Auctus and the
Other Lenders) are receiving shares of Common Stock (in book entry
form) in an amount equal to the allowed amount of their respective
claims multiplied by 100 (an aggregate 1,049,726,797 shares of
Common Stock), with such shares being subject to a leak-out
restriction prohibiting each holder from selling, without the
consent of the Company, more than 33% of its shares during each of
the three initial 30 day periods following the Effective
Date.
(vii) Auctus
and the Other Lenders have been issued, in respect of their allowed
general unsecured claims ($3,261,819 in the case of Auctus and an
aggregate of approximately $382,400 in the case of the Other
Lenders), a convertible promissory note of the Company (each, an
“Unsecured Convertible
Note”) in the allowed amount of the claim, which Unsecured
Convertible Notes have the following material
features:
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(a) |
maturity
date of three years from the Effective Date;
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(b) |
interest
at the rate of 5% per annum;
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(viii) The
issuance of (a) the shares of Common Stock and the Unsecured
Convertible Notes to the holders of allowed general unsecured
claims and (b) the Secured Convertible Notes and Plan Warrants to
Auctus in exchange for the DIP Obligation and any Common Stock into
which those Secured Convertible Notes and those Plan Warrants may
be converted is exempt from the registration requirements of the
Securities Act of 1933, as amended, pursuant to Bankruptcy Code
Section 1145. Such securities shall be freely transferable
subject to Section 1145(b)(i) of the Bankruptcy Code.
The
foregoing descriptions of the Plan, the Confirmation Order, the
Secured Convertible Notes, the Unsecured Convertible Notes, the
Class A Warrants and the Class B Warrants do not purport to be
complete and are qualified in their entirety by reference to the
texts of the Plan and the Confirmation Order, which are filed as
Exhibit A to the Amended Disclosure Statement with respect to the
Plan (filed as Exhibit 2.2
to the Company’s Current Report on Form 8-K for an event dated
October 30, 2020) and Exhibit 2.1 to the Company’s Current
Report on Form 8-K for an event dated October 30, 2020,
respectively, and are incorporated herein by reference,
and the
texts of the forms of the Secured Convertible Note, the Unsecured
Convertible Note, the Class A Warrant and the Class B Warrant,
which are filed as Exhibits A, B, C and D, respectively, to the
Plan Supplement (filed as Exhibit 2.3
to the Company’s Current Report on Form 8-K for an event dated
October 30, 2020) and are incorporated
herein by reference.
Shares Outstanding
As of the Effective Date, there were 1,639,203,270 shares of Common
Stock issued and outstanding. Pursuant to the Plan,
1,049,726,797 shares of Common Stock are issuable in respect of
allowed general unsecured claims. In addition, an aggregate
of 15,226,203,720 shares of Common Stock (subject to increase based
on the antidilution protection provisions of the Plan Warrants) are
issuable pursuant to the Class A Warrants and Class B Warrants
issued as discussed above. Further, an indeterminate number
of shares of Common Stock are issuable upon conversion of the
Secured Convertible Notes and the Unsecured Convertible Notes
issued as discussed above.
See Item 1.03 above.
See Item 1.03 above.
(b) Effective
as of November 16, 2020 (the Effective Date of the Plan), as
contemplated by the Plan, Mark Weinreb, A. Jeffrey Radov, Paul Jude
Tonna and Robert B. Catell resigned as directors of the Company and
Mr. Weinreb resigned as President, Chief Executive Officer and
Chairman of the Board of the Company.
(c) Effective
as of the Effective Date, as contemplated by the Plan, Lance
Alstodt was elected President, Chief Executive Officer, Chairman of
the Board and a director of the Company and Francisco Silva, the
Company’s Vice President, Research and Development, was elected a
director of the Company.
Mr. Alstodt, age 50, served as Executive Vice President and Chief
Strategy Officer of the Company from October 2018 to February
2020. He is a senior healthcare executive with over 25 years
of experience in the medical device, biopharmaceutical and
healthcare services sectors. In 2013, Mr. Alstodt founded and
became CEO of MedVest Consulting Corporation (“MedVest”), an
advisory and capital firm that was formed to focus exclusively on
the healthcare industry. Prior to Medvest, he was a
career investment banker with over 20 years of experience with
respect to acquisitions, leveraged buyouts, private and public
financings, exclusive sales, takeover defenses, joint ventures,
restructurings and general advisory services.
(a) Pursuant
to the Plan, on November 16, 2020, the Company filed a Certificate
of Amendment to its Certificate of Incorporation (the “Certificate of Amendment”) pursuant to
which, among other things, the number of shares of Common Stock
authorized to be issued by the Company has been increased to
300,000,000,000 and the par value of the shares of Common Stock has
been reduced to $0.0001 per share. The foregoing description
of the Certificate of Amendment does not purport to be complete and
is qualified in its entirety by reference to the text of the
Certificate of Amendment, which is filed as Exhibit 3.1 to this
Current Report on Form 8-K and is incorporated herein by
reference.
Forward-Looking Statements
This
Current Report on Form 8-K contains certain forward-looking
statements within the meaning of the “safe harbor” provisions of
the Private Securities Litigation Reform Act of 1995, as amended,
based on our current expectations, estimates and projections about
our operations, financial condition, results of operations, and
liquidity. Statements containing words such as “may,” “believe,”
“anticipate,” “expect,” “intend,” “plan,” “project,” “estimate,” or
similar expressions constitute forward-looking statements. These
forward-looking statements include, but are not limited to,
statements regarding expectations about the timing of future
financings by the Company. Potential factors that could
affect such forward-looking statements include, among others, risks
and uncertainties relating to conditions that may not be satisfied
for various reasons, including reasons outside of the Company’s
control, the receipt of the financing from the DIP Lender provided
for in the Confirmation Order as well as other financing from third
parties, the trading price and volatility of the Company’s shares
of Common Stock and the risks related to trading on the OTC Pink
Market, and the other factors disclosed in the section entitled
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations - Factors that May Affect Future
Results and Financial Condition” in the Company’s most recent
Annual Report on Form 10-K filed with the SEC, as updated from
time to time in the Company’s subsequent filings with the SEC.
Readers are cautioned not to place undue reliance on these
forward-looking statements. Such forward-looking statements
are not guarantees of future performance or results and involve
risks and uncertainties that may cause actual performance and
results to differ materially from those predicted or projected.
Reported results should not be considered an indication of future
performance. Except as required by law, the Company undertakes no
obligation to publicly release the results of any revision to these
forward-looking statements that may be made to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
(d) Exhibits
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.
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BIORESTORATIVE THERAPIES, INC.
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Dated: November 20, 2020
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By:
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/s/ Lance
Alstodt
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Lance Alstodt
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Chief Executive Officer and
President
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