Item 1.01. Entry into a Material Definitive Agreement.
On January 5, 2022, Pluristem Therapeutics, Inc., or the Company, through its
subsidiary Pluristem Ltd., or the Subsidiary, and Tnuva Food Industries -
Agricultural Cooperative in Israel Ltd., through its fully owned subsidiary,
Tnuva Food-Tech Incubator (2019), Limited Partnership, or Tnuva, entered into
certain agreements relating to the establishment and operation of a joint
venture company, Plurinuva Ltd. (which name may be changed from time to time),
an Israeli company, or NewCo, with the purpose of developing cultured meat
products of all types and kinds. NewCo is intended to be engaged in the
development, manufacturing and commercialization of technology, know-how and
products that will be based on licensed products relating to the field, or the
Field, of cultured meat, or the Licensed Products.
The consummation of the transactions contemplated above is subject to the
fulfillment of customary conditions precedent, including without limitation, the
approval of the Israeli Innovation Authority.
In furtherance of the joint venture, Tnuva entered into a Share Purchase
Agreement, or SPA, with NewCo and the Subsidiary, pursuant to which NewCo shall
issue, on the closing date of the SPA, or the Closing Date, 187,500 of its
ordinary shares to Tnuva, constituting 15.79% of its share capital as of the
Closing Date, as well as a warrant, in consideration of an aggregate of
$7,500,000 in cash. The warrant, or the First Warrant, to be issued to Tnuva,
permits Tnuva to purchase up to 125,000 ordinary shares of NewCo at an exercise
price of $40.00 per share, and has a term commencing on the Closing Date and
ending at the earlier of (i) six (6) months from the Closing Date, (ii)
immediately prior to and subject to the consummation of an initial public
offering or acquisition of NewCo or (iii) the consummation of a financing round
with a non-affiliated investor. In addition, on the six (6) months anniversary
of the Closing Date, and provided that the First Warrant has not expired, NewCo
shall issue to Tnuva a second warrant, or the Second Warrant, which will permit
Tnuva to purchase up to a number of ordinary shares, or the then most senior
securities issued by NewCo, of NewCo, in consideration for such amount equal to
200% of the remaining balance of the aggregate purchase price of the First
Warrant, or the Aggregate Exercise Price, provided that Tnuva exercises at least
62,500 ordinary shares at a price per share of $40.00, or $2,500,000 in the
aggregate, of the First Warrant. The Second Warrant's exercise price per share
equals $76.00. The Second Warrant has a term commencing on the six (6) months
anniversary of the Closing Date and ending at the earlier of (i) six (6) months
from its issuance, (ii) immediately prior to and subject to the consummation of
an initial public offering or acquisition of NewCo or (iii) the consummation of
a financing round with a non-affiliated investor. In addition, pursuant to the
SPA, in the event the Company decides to use its technology for the development
of cultured milk or fish products, Tnuva shall also have the right, for a period
of seven (7) years following the Closing Date, to participate in the formation
of additional separate joint ventures for the development of those products.
Prior to the Closing Date, the Subsidiary and NewCo shall execute a Technology
License Agreement, or the License Agreement, and at the Closing, the Subsidiary
and NewCo shall execute a Transitional Services Agreement, or the Services
Agreement. Pursuant to the License Agreement, the Subsidiary shall grant NewCo
an exclusive, royalty bearing, perpetual and irrevocable, worldwide,
non-transferable (except under specific circumstances specified thereunder),
sublicensable license to its technology for the use in the development of the
Licensed Products. In addition, NewCo shall grant the Subsidiary, pursuant to
the License Agreement, an exclusive, perpetual and irrevocable, worldwide,
sublicensable, royalty-free, license to use, make, exploit and develop the
improvements made by NewCo to the licensed technology outside of the Field. In
consideration for the license, NewCo agreed to grant the Subsidiary royalties in
the mid-single digits. Pursuant to the terms of the Services Agreement, the
Subsidiary shall provide NewCo transitional services to support its commercial
efforts on a cost basis, for an initial term of eighteen (18) months, subject to
mutual extension for an additional six (6) months.
Pursuant to the SPA, Tnuva and NewCo agreed to enter into a Commercialization
Agreement within twelve (12) months pursuant to which Tnuva shall be granted
exclusive marketing, distribution and sale rights of the Licensed Products in
Israel. Tnuva's exclusivity in the region will be subject to achieving and
maintaining specific milestones. NewCo shall retain exclusive worldwide
marketing, distribution, and sale rights for the Licensed Products worldwide,
except in Israel.
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