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): March 7, 2007
Brainstorm Cell Therapeutics Inc.
(Exact name of registrant as specified in its charter)
Delaware 333-61610 91-2061053
(State or other jurisdiction of (Commission File No.) (IRS Employer Identification
incorporation) No.)
110 East 59th Street
New York, New York 10022
(Address of principal executive offices) (Zip Code)
(212) 557-9000
(Registrant's telephone number, including area code)
N/A
(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:
|_| 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))
Item 1.01 Entry into a Material Definitive Agreement.
On March 7, 2007, Brainstorm Cell Therapeutics Inc. (the "Company") issued a
$150,000 8% Convertible Promissory Note, dated as of March 5, 2007, and due on
March 5, 2008 (the "Note") to Eli Weinstein (the "Holder") in connection with
the Holder's loan to the Company. Interest on the Note will accrue at the rate
of 8% per annum and will be due and payable in full on March 5, 2008 (the
"Maturity Date"). Any amount overdue shall bear interest from the date it became
overdue at an annual rate of 10% per annum. The Note will become immediately due
and payable upon the occurrence of certain Events of Default, as defined in the
Note. The Holder has the right at any time prior to the close of business on the
Maturity Date to convert all or part of the outstanding principal and interest
amount of the Note into shares of the Company's common stock, $0.00005 par value
per share (the "Common Stock"). Pursuant to the Note, the Company shall not, in
any event, issue greater than 3,000,000 shares of Common Stock, in the
aggregate, to the Holder upon conversion of the Note. The Conversion Price, as
defined in the Note, will be 75% (60% upon the occurrence of an Event of
Default) of the average of the last bid and ask price of the Common Stock as
quoted on the Over-the-Counter Bulletin Board for the five trading days prior to
the Company's receipt of the Holder's written notice of election to convert,
provided that in no event shall the Conversion Price be greater than $0.35.
In connection with the Holder's loan to the Company, the Company agreed to pay
Levi Israel an introducer's fee equal to $15,000. The net proceeds of the loan
to the Company will be $135,000, which is expected to be used for general,
working capital purposes.
On March 7, 2007, in connection with the Note, the Company issued a warrant,
dated as of March 5, 2007, to the Holder to purchase up to 150,000 shares of the
Company's Common Stock at an exercise price of $0.45 per share (the "Warrant").
The Warrant expires on March 5, 2009.
The foregoing description is subject to, and qualified in its entirety by, the
Note and the Warrant filed as exhibits hereto and 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.
A description of the Note is contained in, or incorporated by reference to, Item
1.01 above, which is incorporated herein by reference. The foregoing description
is subject to, and qualified in its entirety by, the Note filed or incorporated
by reference as an exhibit hereto and incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
Items 1.01 and 8.01 are hereby incorporated by reference into this item.
On January 3, 2007, the Company issued 176,327 shares of the Company's Common
Stock to Thomas Rosedale for legal services rendered by Mr. Rosedale and BRL Law
Group LLC.
The issuance of the securities described in this Item 3.02 and in Items 1.01 and
8.01 was effected without registration in reliance on Section 4(2) of the
Securities Act of 1933, as amended, and Regulation D promulgated thereunder, as
a sale by the Company not involving a public offering. No underwriters were
involved with the issuance of such securities.
Item 8.01 Other Events.
On November 9, 2006, the Company issued a $50,000 12% Convertible Promissory
Note due February 12, 2007 (the "November Note") to Zegal and Ross LLP ("Zegal
LLP"), a holder of approximately 11% of the Company's issued and outstanding
stock, in connection with Zegal LLP's loan to the Company. Interest on the
November Note will accrue at the rate of 12% per annum and was due and payable
in full on February 12, 2007 (the "November Note Maturity Date"). Zegal LLP has
verbally agreed to extend the November Note Maturity Date to April 15, 2007 and
to waive any and all interest or fees on, or default under, the November Note.
Any amount overdue shall bear interest from the date it became overdue at an
annual rate of 17% per annum. The November Note will become immediately due and
payable upon the occurrence of certain Events of Default, as defined in the
November Note. Zegal LLP has the right at any time after an Event of Default but
prior to the close of business on the November Note Maturity Date to convert all
or part of the outstanding principal and interest amount of the November Note
into shares of the Company's Common Stock, but only if the Event of Default is
not cured during the stated notice period. Pursuant to the November Note, the
Company shall not, in any event, issue greater than 3,000,000 shares of Common
Stock, in the aggregate, to Zegal LLP upon conversion of the November Note. The
Conversion Price, as defined in the November Note, will be 75% of the average of
the last bid and ask price of the Common Stock as quoted on the Over-the-Counter
Bulletin Board for the five trading days prior to the Company's receipt of Zegal
LLP's written notice of election to convert. The net proceeds of this loan to
the Company was $50,000, which was used for general, working capital purposes.
On January 26, 2007, the Company issued a $25,000 12% Convertible Promissory
Note due February 28, 2007 (the "January Note") to Mark Zegal ("Zegal") in
connection with Zegal's loan to the Company. Interest on the January Note will
accrue at the rate of 12% per annum and was due and payable in full on February
12, 2007 (the "January Note Maturity Date"). Zegal has verbally agreed to extend
the January Note Maturity Date to April 15, 2007 and to waive any and all
interest or fees on, or default under, the January Note. Any amount overdue
shall bear interest from the date it became overdue at an annual rate of 17% per
annum. The January Note will become immediately due and payable upon the
occurrence of certain Events of Default, as defined in the January Note. Zegal
has the right at any time after an Event of Default but prior to the close of
business on the January Note Maturity Date to convert all or part of the
outstanding principal and interest amount of the January Note into shares of the
Company's Common Stock, but only if the Event of Default is not cured during the
stated notice period. Pursuant to the January Note, the Company shall not, in
any event, issue greater than 3,000,000 shares of Common Stock, in the
aggregate, to Zegal upon conversion of the January Note. The Conversion Price,
as defined in the January Note, will be 75% of the average of the last bid and
ask price of the Common Stock as quoted on the Over-the-Counter Bulletin Board
for the five trading days prior to the Company's receipt of Zegal's written
notice of election to convert. The net proceeds of this loan to the Company was
$25,000, which was used for general, working capital purposes.
On March 8, 2007, the Company issued a warrant to Zegal to purchase up to 75,000
shares of the Company's Common Stock at an exercise price of $0.45 per share
(the "March Warrant"). The March Warrant expires on March 8, 2009. The Company
previously issued the November Note to Zegal LLP and the January Note to Zegal.
In consideration of Zegal's agreement to extend the maturity dates of both the
November Note and the January Note and to waive any and all interest or fees on,
or default under, the November Note and the January Note, the Company issued the
March Warrant to Zegal.
On February 5, 2007, the Company issued a $50,000 8% Convertible Promissory Note
due February 5, 2008 (the "February Note") to Shia Rabinowitz ("Rabinowitz") in
connection with Rabinowitz's loan to the Company. Interest on the February Note
will accrue at the rate of eight percent per annum and will be due and payable
in full on February 5, 2008 (the "February Note Maturity Date"). Any amount
overdue shall bear interest from the date it became overdue at an annual rate of
ten percent per annum. The February Note will become immediately due and payable
upon the occurrence of certain Events of Default, as defined in the February
Note. Rabinowitz has the right at any time prior to the close of business on the
February Note Maturity Date to convert all or part of the outstanding principal
and interest amount of the Note into shares of the Company's Common Stock.
Pursuant to the February Note, the Company shall not, in any event, issue
greater than 2,000,000 shares of Common Stock, in the aggregate, to Rabinowitz
upon conversion of the February Note. The Conversion Price, as defined in the
February Note, will be 75% (60% upon the occurrence of an Event of Default) of
the average of the last bid and ask price of the Common Stock as quoted on the
Over-the-Counter Bulletin Board for the five trading days prior to the Company's
receipt of Rabinowitz's written notice of election to convert, provided that in
no event shall the Conversion Price be greater than $0.35. The net proceeds of
this loan to the Company was $50,000, which was used for general, working
capital purposes.
On February 5, 2007, in connection with the February Note, the Company issued a
warrant to Rabinowitz to purchase up to 50,000 shares of the Company's Common
Stock at an exercise price of $0.45 per share (the "February Warrant"). The
February Warrant expires on February 5, 2009.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
10.1 $150,000 8% Convertible Promissory Note, dated March 5, 2007, issued by
the Registrant to Eli Weinstein.
10.2 Common Stock Purchase Warrant, dated March 5, 2007, issued by the
Registrant to Eli Weinstein.
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 hereunto duly authorized.
Brainstorm Cell Therapeutics Inc.
Date: March 12, 2007 By: /s/ Yoram Drucker
-------------------------------
Yoram Drucker
Chief Operating Officer
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
10.1 $150,000 8% Convertible Promissory Note, dated March 5, 2007,
issued by the Registrant to Eli Weinstein.
10.2 Common Stock Purchase Warrant, dated March 5, 2007, issued by
the Registrant to Eli Weinstein.