Item 1.01. Entry into a Material Definitive Agreement.
The information called for by this item is contained in Item 2.03, which is
incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
On October 23, 2020, Cellular Biomedicine Group, Inc. (the "Company") entered
into a Bridge Loan Agreement with TF I Ltd. (the "TF Bridge Loan Agreement")
pursuant to which TF I Ltd. agreed to provide an unsecured loan to the Company
in an aggregate principal amount of $10 million at a simple interest rate of 6%
per annum (the "TF Bridge Loan"). The TF Bridge Loan Agreement was approved by
the Board of Directors (the "Board") of the Company based on the recommendation
of the Special Committee of the Board (the "Special Committee") and its
advisers. TF Capital Ranok Ltd., an affiliate of TF I Ltd., is a member of the
consortium that, through certain newly formed entities, entered into a merger
agreement with the Company on August 11, 2020 (the "Merger Agreement") relating
to the proposed merger previously disclosed in the Company's Current Report on
Form 8-K filed on August 12, 2020 (the "Merger"). The TF Bridge Loan will be
funded as promptly as reasonably practicable. The Company is required to repay
all unpaid principal of the TF Bridge Loan, together with the accrued but unpaid
interest thereon, on the maturity date, which is the earlier of (i) August 7,
2021, and (ii) the occurrence of an event of default (as specified in the
convertible promissory note issued pursuant to the terms of the TF Bridge Loan
Agreement (the "TF Note"), the form of which is attached as Exhibit A to the TF
Bridge Loan Agreement), for so long as any such event of default has not been
remedied by the end of the applicable grace period.
Pursuant to the TF Note, TF I Ltd. has the right, at its option, to convert all
(but not part) of the unpaid principal amount of the TF Bridge Loan together
with the accrued but unpaid interest into common stock of the Company(i) on the
close of business on the maturity date at a conversion price equal to the lower
of (A) $19.50 per share and (B) an amount representing a 15% discount to the
volume weighted average price over the preceding 30 trading days prior to and
including the maturity date, subject to ratable adjustment for any stock split,
stock dividend, stock combination or other recapitalization occurring subsequent
to the date of the TF Note or (ii) immediately prior to (but subject to) the
closing of certain acquisitions of the Company (including the Merger) prior to
the maturity date, at a conversion price equal to the price per share of common
stock payable (or deemed payable) in such acquisition.
A copy of the TF Bridge Loan Agreement is attached as Exhibit 10.1 and is
incorporated herein by reference.
On October 23, 2020, the Company entered into a Bridge Loan Agreement with
Yunfeng Capital Limited (the "Yunfeng Bridge Loan Agreement") pursuant to which
Yunfeng Capital Limited agreed to provide an unsecured loan to the Company in an
aggregate principal amount of $10 million at a simple interest rate of 6% per
annum (the "Yunfeng Bridge Loan"). The Yunfeng Bridge Loan Agreement was
approved by the Board based on the recommendation of the Special Committee and
its advisers. Yunfeng Fund III, L.P., an affiliate of Yunfeng Capital Limited,
is a member of the consortium that, through certain newly formed entities,
entered into a merger agreement with the Company on August 11, 2020 relating to
the Merger. The Yunfeng Bridge Loan will be funded as promptly as reasonably
practicable. The Company is required to repay all unpaid principal of the
Yunfeng Bridge Loan, together with the accrued but unpaid interest thereon, on
the maturity date, which is the earlier of (i) August 7, 2021, and (ii) the
occurrence of an event of default (as specified in the convertible promissory
note issued pursuant to the terms of the Yunfeng Bridge Loan Agreement (the
"Yunfeng Note"), the form of which is attached as Exhibit A to the Yunfeng
Bridge Loan Agreement), for so long as any such event of default has not been
remedied by the end of the applicable grace period.
Pursuant to the Yunfeng Note, Yunfeng Capital Limited has the right, at its
option, to convert all (but not part) of the unpaid principal amount of the
Yunfeng Bridge Loan together with the accrued but unpaid interest into common
stock of the Company (i) on the close of business on the maturity date at a
conversion price equal to the lower of (A) $19.50 per share and (B) an amount
representing a 15% discount to the volume weighted average price over the
preceding 30 trading days prior to and including the maturity date, subject to
ratable adjustment for any stock split, stock dividend, stock combination or
other recapitalization occurring subsequent to the date of the Yunfeng Note or
(ii) immediately prior to (but subject to) the closing of certain acquisitions
of the Company (including the Merger) prior to the maturity date, at a
conversion price equal to the price per share of common stock payable (or deemed
payable) in such acquisition.
A copy of the Yunfeng Bridge Loan Agreement is attached as Exhibit 10.2 and is
incorporated herein by reference.
In a consent letter dated October 23, 2020, CBMG Holdings, as the Parent under
the Merger Agreement, (i) consented to the execution of the TF Bridge Loan
Agreement and the Yunfeng Bridge Loan Agreement (together, the "Loan
Agreements") by the Company, the consumation of transactions contemplated
thereunder and the TF Bridge Loan and Yunfeng Bridge Loan (together, the
"Loans") to be incurred upon the execution of the Loan Agreements, and (ii)
acknowledged that the Loans do not constitute Indebtedness under Section
7.1(b)(vi)(A) of the Merger Agreement.
The securities issuable upon conversion of the TF Bridge Loan Agreement and the
Yunfeng Bridge Loan Agreement will be issued in reliance on an exemption from
registration pursuant to Regulation S promulgated under Section 4(2) of the
Securities Act of 1933, as amended, by the Securities and Exchange Commission
and Regulation D promulgated thereunder. The issuances did not involve any
public offering; no general solicitation or general advertising was used in
connection with the offering.
Item 3.02. Unregistered Sales of Equity Securities.
The information called for by this item is contained in Item 2.03, which is
incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
10.1 Bridge Loan Agreement by and between Cellular Biomedicine Group,
Inc. and TF I Ltd., dated October 23, 2020
10.2 Bridge Loan Agreement by and between Cellular Biomedicine Group,
Inc. and Yunfeng Capital Limited., dated October 23, 2020
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document, included as Exhibit 101).
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