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): November 28, 2018
GENEREX BIOTECHNOLOGY CORPORATION
(Exact name of registrant as specified in its charter)
Delaware | 000-29169 | 98-0178636 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) | (I.R.S Employer Identification No.) |
10102 USA Today Way, Miramar, Florida | 33025 | |
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (416) 364-2551
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:
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Item 1.01 Entry into a Material Definitive Agreement.
On November 28, 2018, Generex Biotechnology Corporation (the “Company”) and Regentys Corporation. (“Regentys”) entered into a binding letter of intent (“LOI”) contemplating the Company’s acquisition of 51% of the outstanding capital stock of Regentys for a total consideration of fifteen million dollars ($15,000,000) in accordance with the terms and conditions of the LOI (the "Proposed Acquisition"). The following is a summary of the material terms and conditions of the LOI.
Consideration for Proposed Acquisition
The Company will purchase newly issued shares of the Regentys common stock representing 51% percent of the issued and outstanding capital stock of Regentys (“Regentys Shares”).
In addition to $400,000 paid to Regentys upon signing of the LOI, the purchase price for the Regentys Shares will consist of the following cash payments, with the proceeds intended to be used for specific purposes, as noted:
In the event that Generex does not make any of the first three payments listed above, at Regentys’ option either:
• | Generex will forfeit all of the Regentys shares issued with no refund of amounts paid; or |
• | Generex will issue shares of its common stock to Regentys equivalent to 110% of the value of the missing payment, which shares will be registered for resale. |
In the event Generex does not make either or both of the fourth and fifth payments, its share ownership of Regentys will be proportionately reduced.
Financial Statement Condition
Conditions to Closing
Post-Closing Management
The LOI contemplates a Regentys Board of seven individuals composed of (i) the Regentys’ CEO (ii) one other officer of the Regentys (iii) the CEO of Generex, (iv) one appointee of the holders of Regentys' Series A Preferred Stock and three independent directors. The Regentys management team will be adjusted only with the approval of a majority of the directors and founders of Regentys. Certain other actions of Regentys will also require approval of the founders.
Restrictions on Transfer
The LOI contemplates that Generex’s ability to transfer its interest in Regentys will be restricted by a Shareholders Agreement among the founders, the holder of the Regentys Series A Preferred and Generex.
The foregoing description of the LOI is not complete and is qualified in its entirety by reference to the LOI, which is filed as Exhibit 10.1 to this report and incorporated herein by reference. The LOI, and the foregoing description of the LOI, have been included to provide investors and our stockholders with information regarding the terms of the LOI.
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Item 7.01 Regulation FD Disclosure.
On November 29, 2018 the Company issued a press release regarding the Regentys LOI. A copy of the press release is attached as Exhibit 99.1 hereto and incorporated herein by reference.
The foregoing information in Item 7.01 of this Current Report on Form 8-K is being furnished pursuant to this Item 7.01 and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and it shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or under the Exchange Act, whether made before or after the date hereof, except as expressly set forth by specific reference in such filing to Item 7.01 of this Current Report on Form 8-K.
By filing this Current Report on Form 8-K and furnishing this information, Generex makes no admission as to the materiality of Item 7.01 in this report. Generex undertakes no duty or obligation to publicly update or revise the information contained in this report, although it may do so from time to time as its management believes is appropriate. Any such updating may be made through the filing of other reports or documents with the SEC, through press releases or through other public disclosure.
Forward-Looking Statements
Statements in this report may contain certain forward-looking statements. All statements included concerning activities, events or developments that the Generex expects, believes or anticipates will or may occur in the future are forward-looking statements. Actual results could differ materially from the results discussed in the forward-looking statements. Forward-looking statements are based on current expectations and projections about future events and involve known and unknown risks, uncertainties and other factors that may cause actual results and performance to be materially different from any future results or performance expressed or implied by forward-looking statements. Known risks and uncertainties also include those identified from time to time in the reports filed by Generex with the Securities and Exchange Commission, which should be considered together with any forward-looking statement. No forward-looking statement is a guarantee of future results or events, and one should avoid placing undue reliance on such statements. Generex undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Generex cannot be sure when or if it will be permitted by regulatory agencies to undertake additional clinical trials or to commence any particular phase of clinical trials. Because of this, statements regarding the expected timing of clinical trials or ultimate regulatory approval cannot be regarded as actual predictions of when Generex will obtain regulatory approval for any “phase” of clinical trials or when it will obtain ultimate regulatory approval by a particular regulatory agency. Generex claims the protection of the safe harbor for forward-looking statements that is contained in the Private Securities Litigation Reform Act. Additional information on these and other risks, uncertainties and factors is included in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other documents filed with the SEC.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
The
list of exhibits called included in this Current Report is incorporated by reference to the Exhibit Index filed with this report.
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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 thereunto duly authorized.
GENEREX BIOTECHNOLOGY CORPORATION. | ||
Date: November 30, 2018 | /s/ Joseph Moscato | |
Joseph Moscato | ||
President and CEO |
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Exhibit Index
Exhibit No. | Description | |
10.1 |
Letter of Intent by and between Regentys Corporation and Generex Biotechnology Corporation effective November 28, 2018. |
|
99.1 |
Press Release dated November 29, 2018 |
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PRIVATE AND CONFIDENTIAL
November 28, 2018
REGENTYS CORPORATION
6135 NW 167 th Street, Suite E-15
Miami Lakes, Florida 33015
Attention: Richard C. Bulman, Jr., CEO
Dear Sir:
Re: Binding Letter of Intent
This letter agreement sets forth our agreement and understanding as to the essential terms of the sale to Generex Biotechnology Corporation, Delaware corporation (or an affiliate thereof) (the “ Purchaser ”) by Regentys Corporation, A Florida corporation (the “ Corporation ”) of equity securities in the capital of the Corporation equal to fifty-one percent (51%) of the authorized and issued equity securities in the capital of the Corporation on a post-closing basis (the “ Transaction ”). The parties intend this letter agreement to be binding and enforceable, and that it will inure to the benefit of the parties and their respective successors and assigns.
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i. | On the Closing Date, the Milestone Payment (without interest) will be deemed applied against the Purchaser’s obligation to make payment of the Purchase Price (320,000 shares of Corporation common stock). |
ii. | In the event of the termination of this letter agreement after payment of the Milestone Payment (otherwise than by operation of the execution and delivery of the Formal Agreement), at the Purchaser’s sole option, (x) the Milestone Payment shall be repayable by the Corporation, without interest, within 180 days of the date of termination of this letter agreement, or (y) in full and final satisfaction of the Corporation’s obligation to repay the Milestone Payment, the Corporation shall issue to the Purchaser that number of common shares in the capital of the Corporation equal to 2% of the issued and outstanding equity securities in the capital of the Corporation (on a post-issuance basis) calculated as at the date of this letter agreement. |
i. | $3,450,000 as a Guaranteed Payment to initiate pre-clinical activities on or before January 15, 2018; |
ii. | $2,000,000 as a Guaranteed Payment to initiate patient recruitment activities on or before May 1, 2019; |
iii. | $3,000,000 as a Guaranteed Payment to initiate a first-in-human pilot study on or before September 1, 2019; |
iv. | $5,000,000 as an Incremental Payment (4,000,000 shares of Corporation common stock) to initiate a human pivotal study on or before February 1, 2020; and |
v. | $1,150,000 as an Incremental Payment (920,000 shares of Corporation common stock) to submit a 510(k) de novo submission to the FDA on or about February 1, 2021. |
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Upon execution and delivery of this letter agreement, for throughout the currency of this letter agreement, one representative of Corporation shall be invited to attend each and every meeting of the board of directors of the Purchaser as an “observer”.
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Signature Page to Follow
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If the foregoing correctly sets forth our mutual understanding and agreement, please so indicate by signing where indicated below and returning a signed copy to the Purchaser.
GENEREX BIOTECHNOLOGY CORPORATION | ||
By: | ||
Name: | Joseph Moscato | |
Title: | President & Chief Executive Officer | |
REGENTYS CORPORATION | ||
11/2/18 | By: | |
Name: | Richard C. Bulman, Jr. | |
Title: | Chief Executive Officer |
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Generex Biotechnology Expands Medical Device & Wound Care Portfolio with Acquisition of
Regentys Corporation
Acquisition of Clinical Stage Developer of A Novel Hydrogel for the
Treatment of Ulcerative Colitis and Other Inflammatory Bowel Diseases
MIRAMAR, FL, November 29, 2018/PRNewswire/ -- Generex Biotechnology Corporation (OTCMKTS:GNBT) is pleased to announce that the company has signed a Letter of Intent to acquire 51% of Regentys Corporation, a regenerative medicine company focused on developing treatments for patients with gastrointestinal (GI) disorders. The company’s first product, Regentys Extra-Cellular Matrix Hydrogel, is a first-in-class, non-pharmacologic, non-surgical treatment option for patients suffering from Ulcerative Colitis. Regentys has received guidance from FDA that the treatment can be approved through the FDA Office of Device Evaluation as a 510K de novo application, and the company will initiate the clinical studies necessary to obtain that approval by Q4 2019. Generex made an initial payment of $400,000 on November 28, 2018 to secure the agreement, and the company is in the process of completing the legal documents with a plan to close the transaction in the coming weeks.
Ulcerative Colitis (“UC”), a disease that affects approximately 750,000 patients in the United States and 1.9 million patients worldwide, is a chronic, inflammatory disease that causes sores or ulcers in the lining of the large intestine (the colon). There are currently four biologics approved by FDA, including the top-selling antibody medicines Humira (adalimumab), Simponi (golimumab), Remicade (infliximab) and Entyvio (vedolizumab), all of which target the pro-inflammatory protein, TNF-a (Tumor Necrosis Factor Alpha). Even with the introduction of expensive biologics, more than half of all patients with ulcerative colitis [UC] do not achieve long-term remission . Many, because of the disease, also require colectomy surgery. Future indications for the drug include Inflammatory bowel disorder and irritable bowel syndrome, conditions that affect millions of patients.
The Regentys™ Extracellular Matrix Hydrogel (“RECMH”) is a proprietary, patented UC treatment that protects damaged tissue from waste flow and promotes tissue regeneration and healing rather than suppressing the immune system as other treatments currently do. The product has been developed with polymeric characteristics that transform ECMH from a liquid to gel form upon adherence to the mucosal lining of the diseased colon, providing a “Bio-Scaffold Bandage” to the affected area. The RECMH Bio-scaffold facilitates healing and functional repair of the colon lining, first by covering the ulcer to limit the inflammatory response, then by providing a framework to mobilize endogenous (the body’s own) stem cells.
Jason Terrell, MD, Chief Medical and Scientific Officer of Generex stated, “ The acquisition of Regentys and their patented Extracellular Matrix Hydrogel technology for tissue regeneration provides Generex with a high-value clinical stage asset. With the FDA guidance to a 510K de novo application for the treatment of Ulcerative Colitis, together with data from an extensive pre-clinical program, we have a clear regulatory path to approval. The RECMH product is well positioned as first line therapy for UC. The clinical trial process is rapidly advancing, and we will keep our investors apprised of results as they become available.”
Joe Moscato, CEO of Generex commented on the acquisition, “Our acquisition of and investment in Regentys will provide Generex with significant upside potential. We have worked closely with CEO Rick Bulman and his team to define the clinical and commercialization strategy, and we look forward to executing on our plan.”
Rick Bulman, CEO of Regentys continued, “ Generex provides our company with an exceptional opportunity for the continued development of a remarkable clinical asset that has the potential to improve patient outcomes, reduce medical costs and better the quality of life of many UC patients. The Regentys family is very excited to collaborate with Joe and his team as they help transform the landscape of health care.”
Cautionary Note Regarding Forward-Looking Statements
This release and oral statements made from time to time by Generex representatives in respect of the same subject matter may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by introductory words such as "expects," "plan," "believes," "will," "achieve," "anticipate," "would," "should," "subject to" or words of similar meaning, and by the fact that they do not relate strictly to historical or current facts. Forward-looking statements frequently are used in discussing potential product applications, potential collaborations, product development activities, clinical studies, regulatory submissions and approvals, and similar operating matters. Many factors may cause actual results to differ from forward-looking statements, including inaccurate assumptions and a broad variety of risks and uncertainties, some of which are known and others of which are not. Known risks and uncertainties include those identified from time to time in the reports filed by Generex with the Securities and Exchange Commission, which should be considered together with any forward-looking statement. No forward-looking statement is a guarantee of future results or events, and one should avoid placing undue reliance on such statements. Generex undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Generex claims the protection of the safe harbor for forward-looking statements that is contained in the Private Securities Litigation Reform Act.
Generex Contact:
Generex Biotechnology Corporation
Joseph Moscato
646-599-6222
Todd Falls
800-391-6755 Extension 222
investor@generex.com
Russo Partners
Investor / Media Contacts:
Alex Fudukidis
(646) 942-5632
alex.fudukidis@russopartnersllc.com
Caroline Cunningham
(212) 845-4292
Caroline.Cunningham@russopartnersllc.com