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):
February 19, 2021
(Exact
name of registrant as specified in its charter)
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(State
or other Jurisdiction of Incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (301 )
825-5320
(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:
Securities
registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading
Symbol(s)
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Name of each exchange
on which registered
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The
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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 ☐
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. ☐
Introduction
On February 19, 2021, CBMG Merger Sub Inc. (“Merger Sub”), a
Delaware corporation and a wholly-owned subsidiary of
CBMG Holdings, an exempted company
with limited liability incorporated under the laws of the Cayman
Islands (“Parent”) merged (the “Merger”)
with and into Cellular Biomedicine Group, Inc. (the
“Company”). The Merger was completed pursuant to the
Agreement and Plan of Merger (the “Merger Agreement”)
entered into on August 11, 2020, by and among the Company, Parent
and Merger Sub. The Company continued as the surviving corporation
and a wholly-owned subsidiary of Parent (the “Surviving
Corporation”).
Item
2.01 Completion
of Acquisition or Disposition of Assets.
The
information set forth in the Introduction to this Current Report on
Form 8-K (the “Introduction”) is incorporated
into this Item 2.01 by reference. Capitalized terms not
otherwise defined have the meanings set forth in the Merger
Agreement.
At
the effective time of the Merger, each ordinary share, par value
$0.001 per share, of the Company (“Common Stock”)
issued and outstanding immediately prior to the effective time
other than (i) shares of Common Stock owned by Parent, Merger Sub
or any other direct or indirect wholly-owned subsidiary of Parent
and shares of Common Stock owned by the Company, (ii) shares of
Common Stock owned by the stockholders, who agreed to cancel the
shares of the Common Stock owned by them for no cash consideration
and subscribe for newly issued shares of Parent, and (iii) shares
of Common Stock owned by stockholders who are entitled to, and who
have timely perfected and have not withdrawn a demand for (or lost
their right to), appraisal rights pursuant to Section 262 of the
General Corporation Law of the State of Delaware) was automatically
cancelled and exchanged into the right to receive $19.75 in cash
(the “Per Share Merger Consideration”), without
interest and subject to any applicable withholding taxes. The
Merger is a “going private transaction” under U.S.
Securities and Exchange Commission rules.
Vested Company Equity
Awards. The vested Stock
Options, RSUs and PSUs (in each case, as defined below) are
referred to herein as “Vested Company Equity Awards.”
Certain outstanding equity awards granted under the Company’s
2014 Equity Incentive Plan, as amended, and the Company’s
2011 Incentive Stock Option Plan, as amended, vested immediately
prior to the Merger pursuant to their terms, and therefore (unless
otherwise agreed between the applicable holder and Parent) were
treated as Vested Company Equity Awards in connection with the
Merger.
Except
as otherwise agreed to in writing between a holder of a Vested
Company Equity Award and Parent, each outstanding Vested Company
Equity Award was automatically canceled immediately prior to the
effective time of the Merger and entitled its holder to receive
(without interest) from the Surviving Corporation, as promptly as
practicable after the effective time of the Merger:
(i)
for each vested outstanding and unexercised option to purchase
shares of Common Stock (“Stock Option”), an amount in
cash equal to (A) the total number of shares of Common Stock
subject to such Stock Option immediately prior to the effective
time of the Merger multiplied by (B) the excess, if any, of
the Per Share Merger Consideration over the exercise price per
share of Common Stock under such Stock Option (subject to any
applicable withholding taxes). Any vested Stock Option which had an
exercise price per share of Common Stock that was greater than or
equal to the Per Share Merger Consideration was canceled at the
effective time of the Merger for no consideration or
payment;
(ii)
for each vested Company time-vesting restricted stock unit
(“RSU”), an amount in cash equal to (A) the total
number of shares of Common Stock subject to such vested RSU
immediately prior to the effective time of the Merger multiplied by
(B) the Per Share Merger Consideration (subject to any
applicable withholding taxes); and
(iii)
for each vested Company performance-vesting restricted stock unit
(“PSU”), an amount in cash equal to (A) the number
of shares of Common Stock subject to such vested PSU, calculated
based on actual performance achieved in accordance with the terms
of each vested PSU, immediately prior to the effective time of the
Merger multiplied by (B) the Per Share Merger Consideration
(subject to any applicable withholding taxes).
The
Buyer Consortium entered into arrangements with certain holders of
Vested Company Equity Awards that provide for the rollover of such
awards into ordinary shares of Parent.
Unvested Company Equity
Awards. Except as otherwise
agreed to in writing between a holder of an Unvested Company Equity
Award (as defined below) and Parent, each Unvested Company Equity
Award outstanding immediately prior to the effective time of the
Merger was assumed by Parent as an equity award of the same type
covering ordinary shares of Parent and continued to have, and be
subject to, the same terms and conditions (including vesting terms)
set forth in the Company equity plan under which it was granted and
the equity award agreements relating thereto, as in effect
immediately prior to the effective time of the Merger, except that
(i) the number of ordinary shares of Parent covered by each
such assumed equity award was equal the number of shares of Common
Stock subject to such equity award, multiplied by the Exchange
Ratio (as defined below), with the result rounded down to the
nearest whole share, and (ii) the per share exercise price for the
ordinary shares of Parent issuable upon exercise of an assumed
equity award that was a Stock Option was equal to the quotient
obtained by dividing the exercise price per share of Common Stock
at which such assumed equity award was exercisable immediately
prior to the effective time of the Merger by the Exchange Ratio,
rounded up to the nearest whole cent. The unvested Stock Options,
RSUs and PSUs are referred to herein as “Unvested Company
Equity Awards.” The “Exchange Ratio” is the ratio
of the Per Share Merger Consideration divided by the fair market
value of one ordinary share of Parent as of the date the Merger is
consummated.
The
description of the Merger set forth above does not purport to be
complete and is qualified in its entirety by reference to the
Merger Agreement, which was filed by the Company as
Exhibit 2.1 to the Company’s Current Report on
Form 8-K filed on August 12, 2020.
Item
3.01 Notice
of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer of Listing.
In
connection with the closing of the Merger, the Company notified the
Nasdaq Global Select Market (“Nasdaq”) on February 19,
2021 that each share of Common Stock (except as described in Item
2.01 hereof) was converted pursuant to the Merger Agreement as
described under Item 2.01, and the Company requested that Nasdaq
file a Form 25 with the Securities and Exchange Commission
(“SEC”) to delist and deregister the Common Stock as of
the close of market on February 19, 2021 pursuant to
Section 12(b) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”). The Company will file
with the SEC a Form 15 requesting the suspension of reporting
obligations with respect to the Common Stock under Sections 13 and
15(d) of the Exchange Act.
The
information set forth under Items 2.01, 3.03 and 5.01 is
incorporated herein by reference.
Item
3.03 Material
Modification to Rights of Security Holders.
Pursuant
to the Merger Agreement and in connection with the consummation of
the Merger, each share of Common Stock (except as described in Item
2.01 hereof) was cancelled and automatically converted into the
right to receive the Per Share Merger Consideration.
The
information set forth under Item 2.01 of this Current Report on
Form 8-K is incorporated herein by
reference.
Item
5.01 Change
in Control of Registrant.
As
a result of the Merger, a change in control of the Company
occurred, and the Company became a wholly-owned subsidiary of
Parent. The total amount of consideration payable to the
Company’s equityholders in connection with the Merger was
approximately $200 million. The funds used by Parent to consummate
the Merger and complete the related transactions came from equity
contributions in cash as contemplated by the equity commitment
letters between Parent and each of the equity
investors.
The
information set forth under Item 2.01 of this Current Report on
Form 8-K is incorporated herein by
reference.
Item
5.02 Departure
of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers.
In
connection with the consummation of the Merger and in accordance
with the Merger Agreement (and not as a result of any disagreement
with the Company), the following directors of the Company: Chun
Kwok Alan Au, Terry Belmont, Jacky (Gang) Ji, Steve (Wentao) Liu,
Darren O’Brien, and Hansheng Zhou ceased to be directors of
the Company, effective as of the effective time of the Merger. Tony
(Bizuo) Liu and Edward Schafer remain as two directors of the
Surviving Corporation.
Effective
upon completion of the Merger, the directors of Merger Sub became
the initial directors of the Surviving Corporation.
Effective
upon completion of the Merger, the officers of the Company, Andrew
Chan, Tony (Bizuo) Liu, and Yihong Yao, became the initial officers
of the Surviving Corporation.
Item
5.03 Amendments
to Certificate of Incorporation or Bylaws; Change in Fiscal
Year.
Effective
upon completion of the Merger, the certificate of incorporation and
bylaws of the Company, as in effect immediately prior to the
effective time of the Merger, were amended and restated in their
entirety. Copies of the Company’s amended and restated
certificate of incorporation and the Company’s amended and
restated bylaws are attached as Exhibits 3.1 and 3.2, respectively,
hereto, each of which are incorporated herein by
reference.
Item
8.01 Other
Events.
On
February 19, 2021, the Company issued a press release announcing
the completion of the Merger. A copy of the press release is
attached hereto as Exhibit 99.1 and is incorporated herein by
reference.
Item
9.01 Financial
Statements and Exhibits.
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Exhibit
No.
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Description
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Amended
and Restated Certificate of Incorporation of Cellular Biomedicine Group,
Inc.
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Amended
and Restated Bylaws of Cellular
Biomedicine Group, Inc
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Press
Release dated February 19,
2021
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104
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Cover
Page Interactive Data File (embedded within the Inline XBRL
document).
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SIGNATURE
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant
has caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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Cellular Biomedicine Group, Inc.
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Date:
February 19, 2021
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By:
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/s/
Andrew Chan
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Andrew
Chan
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Chief
Legal Officer
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