Attached files
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| EX-10.2 - MAXIMUM PLEDGE CONTRACT - Cellular Biomedicine Group, Inc. | cbmg_ex102.htm |
| EX-10.1 - CREDIT AGREEMENT - Cellular Biomedicine Group, Inc. | cbmg_ex101.htm |
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): January 19,
2019
CELLULAR BIOMEDICINE GROUP, INC.
(Exact
name of registrant as specified in its charter)
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Delaware
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001-36498
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86-1032927
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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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1345 Avenue of the Americas, Fl11
New York, New York
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10105
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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: (347) 905
5663
(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:
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☐
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
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☐
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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☐
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
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☐
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
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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. ☐
Item 1.01 Entry into a Material Definitive
Agreement.
On
January 19, 2019, Shanghai Cellular Biopharmaceutical Group Ltd.
(“CBMG
Shanghai”), a controlled entity of Cellular
Biomedicine Group, Inc. (the “Company”), entered into a credit
agreement (the “Credit
Agreement”) with China Merchants Bank, Shanghai Branch
(the “Merchants
Bank”). Pursuant to the Credit Agreement, the
Merchants Bank agreed to extend credit of up to RMB 100 million
(approximately $14.7 million) to CBMG Shanghai via revolving and/or
one-time credit lines. The types of credit available under the
Credit Agreement, include, but not limited to, working capital
loans, trade financing, commercial draft acceptance, letters of
guarantee and derivative transactions. The credit period under the
Credit Agreement runs until December 30, 2019. As of the date of
this Current Report on Form 8-K, no amounts had been drawn down
under the Credit Agreement.
Pursuant to the
Credit Agreement, CBMG Shanghai will enter into a supplemental
agreement with the Merchants Bank prior to the applicable drawdown
that will set forth the terms of each borrowing thereunder (except
for working capital loans), including principal, interest rate,
term of loan and use of borrowing proceeds. With regard to working
capital loans to be provided pursuant to the Credit Agreement, CBMG
Shanghai shall submit a withdrawal application that includes the
principal amount needed, purposes of the loan and a proposed
quarterly interest rate and term of the loan for the Merchants
Bank’s review and approval. The terms approved by the bank
will govern such working capital loans. The bank has the right to
adjust the interest rate for working capital loans from time to
time based on changes in national policy, changes in interest rate
published by the People’s Bank of China, credit market
conditions and the bank’s credit policies. Upon CBMG
Shanghai’s non-compliance with the agreed use of loan
proceeds, the interest rate for the amount of loan proceeds
improperly used will be the original rate plus 100% starting on the
first day of such use. If CBMG Shanghai fails to pay a working
capital loan on time, an extra 50% interest will be charged on the
outstanding balances starting on the first day of such
default.
Under
the Credit Agreement, CBMG Shanghai has the obligation to notify
the Merchants Bank prior to certain corporate actions and assist
the bank in taking measures to ensure repayment of the loans
provided under the Credit Agreement upon occurrence of such events.
Such corporation actions include: (i) major financial losses and
assets losses, (ii) loans to or guarantees for third parties or
mortgages on its properties, (iii) revocation or cancellation of
business license or applications for bankruptcy, (iv) major
operational or financial crises of its controlling shareholder or
other related entities that affect its business operations, (v)
related party transactions that involve 10% or more of CBMG
Shanghai’s net assets and (vi) legal proceeding that have
material adverse effects on its operations or financial condition.
Pursuant to the Credit Agreement, CBMG Shanghai cannot enter into a
merger, an acquisition or a joint venture, transfer its equity
interest or consummate a reorganization or share ownership
restructuring without prior written consent of the Merchants Bank.
The Credit Agreement also contains a covenant requiring that CBMG
Shanghai maintain or improve its existing operations and preserve
or increase the value of its existing assets.
Events
of default under the Credit Agreement include, among other matters,
CBMG Shanghai’s failure to perform its obligations
thereunder, untrue or inaccurate representations, use of loan
proceeds for purposes that are inconsistent with the Credit
Agreement or related agreements. Additionally, a default under any
other loan agreement of CBMG Shanghai that is not cured within
three months of such default shall be deemed an event of default
under the Credit Agreement. Upon the occurrence of an event of
default, the Merchant Bank has the right to reduce the credit
available under the Credit Agreement, suspend the use of the
remaining credit by CBMG Shanghai and declare all outstanding
balance to become immediately due and payable.
Pursuant to a
pledge agreement which became enforceable upon execution of the
Credit Agreement, Cellular Biomedicine Group Ltd. (HK), a wholly
owned subsidiary of the Company (“CBMG HK”), provided a guarantee of
CBMG Shanghai’s obligations under the Credit Agreement. In
connection with such guarantee, CBMG HK deposited $17,000,000 into
its account at the Merchants Bank for a 12-month period starting
January 7, 2019 and also granted the Merchants Bank a security
interest in the cash deposited.
The
foregoing descriptions of the Credit Agreement and the Pledge
Agreement are qualified in their entirety by reference to such
agreements, which are filed herewith as Exhibit 99.1 and 99.2,
respectively, to this Current Report on Form 8-K.
Item
2.03 Creation
of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The
information set forth above under Item 1.01 of this Current Report
on Form 8-K is hereby incorporated into this Item 2.03 by
reference.
Item
9.01. Financial
Statements and Exhibits.
(d)
Exhibits
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Exhibit No.
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Description
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Credit
Agreement, dated as of January 19, 2019, by and between Shanghai
Cellular Biopharmaceutical Group Ltd. and China Merchants Bank Co.,
Ltd., Shanghai Branch
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Pledge
Agreement, dated as of January 9, 2019, by and between Cellular
Biomedicine Group Ltd. (HK) and China Merchants Bank Co., Ltd.,
Shanghai Branch
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2
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:
January 25, 2019
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By:
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/s/ Bizuo
(Tony) Liu
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Bizuo
(Tony) Liu
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Chief
Executive Officer
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