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 (see General Instruction A.2. below):
Indicate by check mark whether the registrant is an emerging growth company
as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR
§240.12b-2).
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. ☒
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Item 1.01
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Entry Into A Material Agreement.
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On June 11, 2021, Brain
Scientific Inc. (the “Company”) entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”)
with Piezo Motion Corp., a Delaware corporation (“Piezo”), and BRSF Acquisition Inc., a Delaware corporation and a wholly-owned
subsidiary of the Company (“Merger Sub”). Pursuant to the terms and subject to the conditions
set forth in the Merger Agreement, Merger Sub will be merged with and into Piezo, Merger Sub will cease to exist and Piezo will survive
as a wholly-owned subsidiary of the Company (the “Merger”).
At
the effective time of the Merger (the “Effective Time”), each outstanding share of Piezo capital stock will be automatically
converted into the right to receive that number of shares of Company common stock equal to 100% of the issued and outstanding shares of
Company common stock on a “fully diluted basis” (as defined in the Merger Agreement) calculated as of the Effective Time (the
“Exchange Ratio”). No fractional shares of Company common stock will be issued in the Merger. Following the consummation
of the Merger, former stockholders of Piezo are expected to own approximately 50% of the Company and current stockholders of the Company
are expected to own approximately 50% of the Company, in each case based on the fully diluted shares of the Company prior to the consummation
of the Merger. The Exchange Ratio and the actual number of shares of Company common stock to be issued to the Piezo stockholders is not
yet determinable and will be based on, in part, whether and to what extent the Company’s existing indebtedness is converted into
Company common stock or repaid in cash at or prior to the Effective Time, and is expected to result in the former Piezo stockholders owning
a majority of the Company’s issued and outstanding shares of common stock as of immediately after the Effective Time.
The Merger Agreement
provides that, at or prior to the Effective Time, the board of directors of the Company (the “Board”) will take the following
action, to be effective upon the Effective Time: (i) increase the size of the Company’s Board of Directors from 2 to 5 members,
(ii) elect to the Board Hassan Kotob; and (iii) appoint as the officers of the Company Hassan Kotob and Bonnie-Jeanne Gerety, or, in either
case with regard to clauses (ii) and (iii), such other persons designated by Piezo. The Merger Agreement also provides that the current
officers of the Company shall resign from their positions with the Company effective upon the Effective Time; provided, however, that
Boris Goldstein, currently the Company’s Chairman, Executive Vice President and Secretary, shall be appointed to serve for a period
of one year as Chief Science Officer of the Company (or of MemoryMD, Inc., a Delaware corporation and a wholly owned subsidiary of the
Company (“MemoryMD”)), effective upon the Effective Time, upon terms as set forth in the Merger Agreement In addition, Dr.
Goldstein shall receive a special bonus as a result of the closing of the Merger and, further, is eligible to receive a special bonus
in the event the Company uplists to a senior stock exchange. The members of the Company’s current Board shall continue to serve
as directors of the Company following the Effective Time.
The completion of the
Merger is subject to various customary conditions, including, among other things: (a) the approval of the respective stockholders
and boards of directors of the Company, Merger Sub, and Piezo; (b) subject to certain materiality exceptions, the accuracy of the
representations and warranties made by each of the Company and Piezo and the compliance by each of the Company and Piezo with their respective
obligations under the Merger Agreement; (c) approval of the transactions contemplated by the Merger Agreement by any third-parties and
governmental entities as may be required by law; (d) the execution and delivery of an assignment and assumption agreement between the
Company and MemoryMD, pursuant to which the Company shall assign to MemoryMD, and MemoryMD shall assume from the Company, all of the Company’s
operating assets and liabilities, subject to certain exceptions; (e) the completion of all necessary legal due diligence by each of the
Company and Piezo; (f) the first closing of a capital raise by the Company of at least $5.0 million (the “Offering”), including
any interim bridge financing raised by either Company or Piezo that is convertible into the Offering, consisting of a 10% convertible
promissory note and common stock purchase warrants, upon the terms and subject to the conditions of a separate securities purchase agreement;
and (g) the number of shares of Piezo common stock held by Piezo stockholders who did not vote to adopt the Merger Agreement shall not
exceed 10% of the number of outstanding shares of Piezo common stock as of the Effective Time.
The Merger Agreement
contains customary representations, warranties and covenants, including covenants obligating each of the Company and Piezo to continue
to conduct its respective business in the ordinary course, to provide reasonable access to each other’s information and to use reasonable
best efforts to cooperate and coordinate to make any filings or submissions that are required to be made under any applicable laws or
requested to be made by any government authority in connection with the Merger.
Pursuant to the terms
of the Merger Agreement, the Company is obligated to issue to certain affiliates and non-affiliates of the Company, options and warrants
to purchase an aggregate number of shares equal to 20% of the issued and outstanding shares of Company common stock immediately after
the Effective Time.
The Merger Agreement
contains certain termination rights in favor of each of the Company and Piezo.
The foregoing summary of
the Merger Agreement and the Merger does not purport to be complete and is subject to, and qualified in its entirety by, the full text
of the Merger Agreement, a copy of which is attached hereto as Exhibit 2.1 and is incorporated by reference herein.
The Merger Agreement
has been provided pursuant to applicable rules and regulations of the United States Securities and Exchange Commission in order to provide
investors and stockholders with information regarding its terms. However, it is not intended to provide any other factual information
about the Company, Piezo, their respective subsidiaries and affiliates or any other party. In particular, the representations, warranties
and covenants contained in the Merger Agreement have been made only for the purpose of the Merger Agreement and, as such, are intended
solely for the benefit of the parties to the Merger Agreement. In many cases, the representations, warranties and covenants are subject
to limitations agreed upon by the parties and are qualified by certain disclosures exchanged by the parties in connection with the execution
of the Merger Agreement. Furthermore, many of the representations and warranties in the Merger Agreement are the result of a negotiated
allocation of contractual risk among the parties and, taken in isolation, do not necessarily reflect facts about the Company, Piezo, their
respective subsidiaries and affiliates or any other party. Likewise, any reference to materiality contained in the representations and
warranties may not correspond to concepts of materiality applicable to investors or stockholders. Finally, information concerning the
subject matter of the representations and warranties may change after the date of the Merger Agreement and these changes may not be fully
reflected in the Company’s public disclosures.
As a result of the
foregoing, investors are encouraged not to rely on the representations, warranties and covenants contained in the Merger Agreement, or
on any descriptions thereof, as accurate characterizations of the state of facts or condition of the Company or any other party. Investors
and stockholders are likewise cautioned that they are not third-party beneficiaries under the Merger Agreement and do not have any direct
rights or remedies pursuant to the Merger Agreement.
Forward Looking Statements
Statements in this
Current Report on Form 8-K (the “Form 8-K”) regarding the proposed Merger, the timing, conditions to and anticipated completion
of the proposed Merger, the expected ownership of the combined company and the combined company’s board of directors constitute
forward-looking statements. Any statements that are not purely statements of historical fact should also be considered to constitute forward-looking
statements. There are a number of important factors that could cause actual results or events to differ materially from those indicated
by such forward-looking statements, including the risk that the Company and Piezo may not be able to complete the proposed Merger and
other risks and uncertainties more fully described in the Company’s Annual Report on Form 10-K for the year ended December 31,
2020 as filed with the SEC on April 15, 2021, its Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 as filed with
the SEC on May 24, 2021, as well as the other filings that the Company makes with the SEC. Investors and security holders are also urged
to read the risk factors set forth in the proxy statement or information statement, as the case may be, carefully when they are available.
In addition, the statements
made in this Form 8-K reflect the Company’s expectations and beliefs as of the date of the filing of the Form 8-K. The Company anticipates
that subsequent events and developments will cause its expectations and beliefs to change. However, while the Company may elect to update
these forward-looking statements publicly at some point in the future, it specifically disclaims any obligation to do so, whether as a
result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing the
Company’s views as of any date after the date of filing of the Form 8-K.
Important Information and Where to
Find It
The Form 8-K does not
constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. The Company
shall seek the approval of the Merger Agreement and the Merger from its stockholders either at a duly called meeting of stockholders,
or by written consent. In the event that stockholder approval of the proposed transactions is solicited at a duly called meeting of stockholders,
a definitive proxy statement and a proxy card will be filed with the SEC and will be mailed to the
Company’s stockholders seeking any required stockholder approvals in connection with the proposed transactions. In the event
that the proposed transactions are approved by the Company’s stockholders by written consent, the Company shall thereafter prepare
and file a definitive information statement with the SEC which shall be mailed to the Company’s stockholders. BEFORE MAKING ANY
VOTING OR INVESTMENT DECISION, INVESTORS AND STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT (IF APPLICABLE) AND THE MERGER AGREEMENT
(INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT THE COMPANY MAY FILE WITH THE SEC WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTIONS. Stockholders may obtain, free of charge, copies
of the proxy statement (if applicable), the Merger Agreement and any other documents filed by the Company with the SEC in connection with
the proposed transactions at the SEC’s website (http://www.sec.gov), at the Company’s website, or by directing written request
to: Brain Scientific Inc., 125 Wilbur Place, Suite 170, Bohemia, NY 11716, Attention: Boris Goldstein.
The
Company and its directors and executive officers and Piezo and its directors and executive officers may be deemed to be participants in
the solicitation of proxies, if applicable, from the stockholders of the Company in connection with the proposed transaction. Information
regarding the special interests of these directors and executive officers in the Merger will be included in the proxy statement (if applicable)
referred to above. Additional information regarding the directors and executive officers of the Company is also included in the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2020, which was filed with the SEC on May 24, 2021. This document is
available free of charge at the SEC web site (www.sec.gov), at the Company’s website, or by directing a written request to the Company
as described above.