ITEM 3.02. UNREGISTERED SALE OF EQUITY SECURITIES
On April 28, 2021, Scientific Bioprocessing Holdings, Inc. ("Bioprocessing"), a
wholly-owned subsidiary ofScientific Industries, Inc. (the "Company), entered
into an Agreement on the Sale and Transfer of all Shares in aquila biolabs GMBH
(the "Acquisition Agreement") with each of the owners (the "Sellers") of the
share capital of aquila biolabs GMBH ("aquila") pursuant to which Bioprocessing
agreed to purchase and the Sellers agreed to sell all the outstanding share
capital of aquila (the "Acquisition"). The closing of the purchase and sale (the
"Closing") occurred on April 29, 2021. The aggregate consideration paid for the
share capital of aquila was € 6,499,063 (US$7,880,114). The Acquisition
Agreement contains customary conditions, representations, warranties,
indemnities and covenants by, among, and for the benefit of the parties.
Immediately following the Closing, aquila entered into new Director's Service
Agreements (the "Service Agreements") with each of Jens Bayer, Konrad Herzog,
David Frank and Daniel Grünes in their capacities as Managing Directors of
aquila. The Managing Directors will conduct the business of aquila and report to
aquila's Supervisory Board, the members of which are Helena Santos, John Moore
and Reinhard Vogt. In 2021, each Managing Director will receive a salary of
€105,000, as well as a guaranteed bonus of €45,000. In 2022, each Managing
Director will receive a salary of €105,000 and a bonus of €45,000, subject to
the achievement by aquila of certain targets.
A copy of the Acquisition Agreement and the form of Service Agreement are
attached hereto as exhibits. This summary description does not purport to be
complete and is qualified in its entirety by reference to the Acquisition
Agreement and the form of Service Agreement which are incorporated herein by
reference.
In connection with the Acquisition, on April 28, 2021, the Company entered into
a Securities Purchase Agreement (the "Purchase Agreement") with certain
investors (the "Investors") pursuant to which the Company sold, and the
Investors purchased, an aggregate of 1,595,880 shares of common stock (the
"Shares") and warrants (the "Warrants") to purchase up to an additional 797,940
shares of common stock (the "Warrant Shares"), at an offering price of $4.75 per
share, for a total consideration of $7,580,430. The closing under the Purchase
Agreement occurred on April 29, 2021, and the Company contributed the net
proceeds from the sale of the securities to Bioprocessing for application to the
purchase price under the Acquisition Agreement.
Each Warrant is exercisable for the purchase of one share of the Company's
common stock at an exercise price of $9.50 per share. The Warrants are
immediately exercisable and expire five years from their date of issuance. If at
any time commencing 12 months from the Closing Date, but before the expiration
of the Warrant, the volume weighted average pricing of the Company's common
stock exceeds $19.00 (subject to adjustment for forward and reverse stock
splits, recapitalizations, stock dividends and the like) for each of thirty
consecutive trading days, then the Company may, at any time in its sole
discretion, call for the exercise of the Warrants, in their entirety.
The Company also entered into a Registration Rights Agreement dated April 29,
2021 (the "Registration Rights Agreement") with the Investors, pursuant to which
the Company has agreed to prepare and file with the Securities and Exchange
Commission a registration statement so as to permit the registered resale of the
Shares and the Warrant Shares. The Company shall use its best efforts to have
such registration statement declared effective for a period of one (1) year
following the initial date of effectiveness. In addition, the holders of at
least twenty per cent (20%) of the Shares and Warrant Shares shall have the
right, exercisable at any time prior to the fifth (5th ) anniversary of the
Closing Date, to request that the Company file with the Securities and Exchange
Commission a registration statement for all or part of the Shares and Warrant
Shares beneficially owned by the holders of such securities.
The sale was made in a private placement transaction, pursuant to the exemption
provided by Section 4(2) of the Securities Act and certain rules and regulations
promulgated under that section and pursuant to exemptions under state securities
laws.
This Current Report on Form 8-K is neither an offer to sell nor the solicitation
of an offer to buy the Shares, Warrant Shares or any other securities and shall
not constitute an offer, solicitation or sale in any jurisdiction in which such
offer, solicitation or sale is unlawful.
A copy of the Purchase Agreement and the Registration Rights Agreement and the
form of Warrant are attached hereto as exhibits. This summary description does
not purport to be complete and is qualified in its entirety by reference to the
Purchase Agreement and the Registration Rights Agreement and the form of Warrant
which are incorporated herein by reference.
ITEM 5.02. DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF PRINCIPAL OFFICERS
As of April 29, 2021, the Board of Directors of the Company appointed Dr. Jürgen
Schumacher as a Class A Director.
Dr. Schumacher, age 67, is currently a private investor in various startups and
growth phase technology companies.
ITEM 9.01 Financial Statements and Exhibits
(a) Financial Statements of Business Accquired
The Company intends to file the financial statements of the business acquired
under cover of a Form 8-K/A no later than 71 calendar days after the date this
report was required to be filed.
(b) Pro Forma Financial Information
The Company intends to file pro forma financial information under cover of Form
8-K/A no later rhan 71 calendar days after the date this report was required to
be filed.
(c) Exhibits
Exhibit No. Description
4.1 Form of Warrant
4.2 Registration Rights Agreement by and among the Company and the Investors
10.1 Acquisition Agreement by and among the Company and the Sellers
10.2 Form of Service Agreement
10.3 Purchase Agreement by and among the Company and the Investors
99.1 Press Release with respect to the Acquisition dated April 29, 2021
99.2 Press Release with respect to appointment of Dr. Schumacher as a Director
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