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Posted On: 04/04/2019 3:14:21 PM
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Item 1.01 Entry into a Material Definitive Agreement.
On March 29, 2019, Generex Biotechnology Corporation (“ Generex ”), its wholly owned subsidiary NuGenerex Distribution Solutions 2, LLC (“ NDS ”), and Veneto Holdings, L.L.C. (“ Veneto ”) entered into a Restructuring Agreement of the payment terms of a Promissory Note entered into on January 15, 2019, regarding an Asset Purchase Agreement entered into on October 3, 2019. The principal amount due under the Promissory Note of $35,000,000 has been materially amended as follows:
Under the Restructuring Agreement, in lieu of any other payments under the APA or the Promissory Note issued pursuant to the APA, and the Amendment Agreement dated January 15, 2019, Generex will deliver shares of Generex and its subsidiary, Antigen Express, Inc.
All Generex stock delivered pursuant to the Restructuring Agreement will be outstanding shares held by four Generex shareholders, or a trust to which they will contribute their shares, who have agreed to make their shares available for Generex’s benefit, and therefore will not increase the outstanding shares. The specific shares to be delivered are:
• An aggregate 8,400,000 shares of Generex common stock to be delivered on or before April 22, 2019;
• An aggregate 5,500,000 shares of common stock of Antigen Express, Inc., (an increase from 3,500,000 shares previous agreed and approximately 1.4% of the outstanding Antigen shares) ; and
• Limited “downside protection” on the value of the Generex shares. Generex will deliver additional shares (“Compensatory Shares”) to the Members to assure the Members an aggregate value of $2.50 per shares times 8,400,000. On the Pay Date of June 15, 2020 (“Pay Date”) the Members will receive Compensatory Shares in accordance with the following calculation, if the following results in a positive number: $2.50 per Generex share times the shares issued (8,400,000) minus the Sale Price of the proceeds of sale of any Generex shares by the Members in the interim (“Sale Price”) times the number of shares sold (“Shares Sold”) divided by the Spot Price of the price of the common voting shares of Generex on the Pay Date (“Spot Price”). Any sale above the Strike Price shall be discarded. The Sale Price shall, for calculation under this agreement shall be no less than $1.50 per share. Any actual proceeds of sale that are less than $1.50 per shares shall be calculated at $1.50 regardless of the actual proceeds of sale. As such, the Members shall have downside protection from $2.50 to $1.50. The downside protection lapses if the volume weighted average price of the Generex shares, in any period of 90 consecutive trading days, is over $5 per share.
The recipients of the shares will be the Members as well as a Long Term Incentive Compensation Plan of Veneto whose beneficiaries include 35 former Veneto employees. The recipients of the Generex shares have agreed not sell more than 10% of the daily average volume of Generex shares per trading day, or 10% of average weekly volume, with certain exceptions.
The recipients of the Generex shares under the Restructuring Agreement have the right to include those shares in any Registration Statement filed with the Securities and Exchange Commission (“Registration”), if any.
This Current Report contains summaries of the material terms of the Restructuring Agreement. The summaries of this document is subject to, and are qualified in their entirety by, reference to the Restructuring Agreement, which is filed as an exhibit hereto and incorporated herein by reference.
http://secfilings.com/searchresultswide.aspx?...d=13345470
Item 1.01 Entry into a Material Definitive Agreement.
On March 29, 2019, Generex Biotechnology Corporation (“ Generex ”), its wholly owned subsidiary NuGenerex Distribution Solutions 2, LLC (“ NDS ”), and Veneto Holdings, L.L.C. (“ Veneto ”) entered into a Restructuring Agreement of the payment terms of a Promissory Note entered into on January 15, 2019, regarding an Asset Purchase Agreement entered into on October 3, 2019. The principal amount due under the Promissory Note of $35,000,000 has been materially amended as follows:
Under the Restructuring Agreement, in lieu of any other payments under the APA or the Promissory Note issued pursuant to the APA, and the Amendment Agreement dated January 15, 2019, Generex will deliver shares of Generex and its subsidiary, Antigen Express, Inc.
All Generex stock delivered pursuant to the Restructuring Agreement will be outstanding shares held by four Generex shareholders, or a trust to which they will contribute their shares, who have agreed to make their shares available for Generex’s benefit, and therefore will not increase the outstanding shares. The specific shares to be delivered are:
• An aggregate 8,400,000 shares of Generex common stock to be delivered on or before April 22, 2019;
• An aggregate 5,500,000 shares of common stock of Antigen Express, Inc., (an increase from 3,500,000 shares previous agreed and approximately 1.4% of the outstanding Antigen shares) ; and
• Limited “downside protection” on the value of the Generex shares. Generex will deliver additional shares (“Compensatory Shares”) to the Members to assure the Members an aggregate value of $2.50 per shares times 8,400,000. On the Pay Date of June 15, 2020 (“Pay Date”) the Members will receive Compensatory Shares in accordance with the following calculation, if the following results in a positive number: $2.50 per Generex share times the shares issued (8,400,000) minus the Sale Price of the proceeds of sale of any Generex shares by the Members in the interim (“Sale Price”) times the number of shares sold (“Shares Sold”) divided by the Spot Price of the price of the common voting shares of Generex on the Pay Date (“Spot Price”). Any sale above the Strike Price shall be discarded. The Sale Price shall, for calculation under this agreement shall be no less than $1.50 per share. Any actual proceeds of sale that are less than $1.50 per shares shall be calculated at $1.50 regardless of the actual proceeds of sale. As such, the Members shall have downside protection from $2.50 to $1.50. The downside protection lapses if the volume weighted average price of the Generex shares, in any period of 90 consecutive trading days, is over $5 per share.
The recipients of the shares will be the Members as well as a Long Term Incentive Compensation Plan of Veneto whose beneficiaries include 35 former Veneto employees. The recipients of the Generex shares have agreed not sell more than 10% of the daily average volume of Generex shares per trading day, or 10% of average weekly volume, with certain exceptions.
The recipients of the Generex shares under the Restructuring Agreement have the right to include those shares in any Registration Statement filed with the Securities and Exchange Commission (“Registration”), if any.
This Current Report contains summaries of the material terms of the Restructuring Agreement. The summaries of this document is subject to, and are qualified in their entirety by, reference to the Restructuring Agreement, which is filed as an exhibit hereto and incorporated herein by reference.
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Disclaimer: Of course, all of this is my opinion and you should not make any investment decisions based on my opinion. I have not received any non-public information.
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