Item 1.01. Entry into a Material Definitive Agreement.
License and Technology Access Agreement
On March 28, 2022, ThermoGenesis Holdings, Inc. (the "Company", "we," "our," or
"us") announced the planned expansion of the Company's business to include
contract development and manufacturing (CDMO) services for cell and cell-based
gene therapies. In furtherance of our planned CDMO business, on March 24, 2022,
we entered into a License and Technology Access Agreement with Boyalife Genomics
(the "Boyalife License Agreement"). Boyalife Genomics is an affiliate of our
Chairman and CEO, Dr. Chris Xu, and is a Tianjin, China-based cell manufacturing
organization that has developed substantial manufacturing technology relating to
cell manufacturing services.
Under the terms of the Boyalife License Agreement, Boyalife Genomics granted the
Company and its subsidiaries and affiliates a perpetual exclusive license in the
United States to use Boyalife Genomics' existing and future know-how and U.S.
patents rights (if any) relating to cell manufacturing and related processes.
Notwithstanding the foregoing exclusivity, Boyalife Genomics retains the right
to use (but not license) the licensed intellectual property in the U.S. for its
internal use in connection with the provision of products and services to third
parties. In consideration of this license, the Company will pay to Boyalife
Genomics a running royalty of 7.5% of the Company's annual net sales of products
and services that are covered by one of more Boyalife Genomics' granted U.S.
patents and 5.0% of other products and services covered by the licensed
intellectual property. The royalty will be payable on each licensed product or
service for a period of 10 years from the first commercial sale of the product
or service (or if patented, until the expiration of the applicable licensed
patent(s)), and the license will be royalty-free thereafter on such licensed
product or service. As additional consideration for the license, the Company
transferred to Boyalife Genomics' all of the Company's 8.63% minority equity
interest in ImmuneCyte Inc. The license includes the right of the Company to
sublicense the intellectual property to Company affiliates without the consent
of Boyalife, but any sublicense to a non-affiliate requires the consent of
Boyalife. The Company has the right to terminate the license agreement at any
time for convenience, and the agreement contains other customary early
termination rights (including a right to terminate due to an uncured material
breach by the other party or the bankruptcy of the other party). The agreement
contains other customary provisions for intellectual property license
agreements, including provisions relating to confidentiality and ownership of
new intellectual property relating to cell manufacturing. The agreement also
grants to the Company a right of first refusal to purchase any cell
manufacturing business or operation of Boyalife Genomics upon the same terms as
any third-party offer to buy such business or operation.
CDMO Facility Lease
Also on March 24, 2022, we entered into a Lease Agreement with Z3 Investment LLC
("Lessor") for a facility that we intend to house our planned CDMO business (the
"CDMO Facility Lease"). The CDMO Facility Lease provides for approximately
35,475 square feet of space in the Sacramento, California area in which we plan
to partner with the Lessor to build out into a state-of-the-art current good
manufacturing practice (cGMP) compliant facility with 12 cGMP clean room suites
(with Lessor funding up to $3.0 million of such build-out costs). The CDMO
Facility Lease provides for a lease term beginning on April 1, 2022 and ending
on September 30, 2027, with a right of the Company to extend the lease for 2
additional periods of 5 years each. The CDMO Facility Lease provides for initial
monthly rent of $46,116, which increases in November 2022 to $103,587 per month,
and with annual escalations thereafter of up to $125,936 per month in the final
scheduled year of the lease. We are also obligated to pay all operating expenses
of the leased premises. The CDMO Facility Lease contains other customary
provisions for a lease of a facility of this type, including provisions relating
to security deposits, indemnity, and the right of Lessor to terminate the lease
early for breach. Lessor is an affiliate of our Chairman and CEO, Dr. Xu. We
believe that the terms of the CDMO Lease and the Boyalife License Agreement are
more favorable to us than the terms that could be obtained from a non-affiliate
third party.
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The description of the License Agreement and CDMO Facility Lease set forth above
are necessarily incomplete and are qualified by reference to the full text of
such agreements, which are attached to this Form 8-K as Exhibit 10.1 and 10.2,
respectively, and which are incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
10.1 License and Technology Access Agreement, dated March 24, 2022,
between ThermoGenesis Holdings, Inc. and Boyaife Genomics Tianjin
Ltd.
10.2 Lease Agreement, dated March 24, 20222, between ThermoGenesis
Holdings, Inc. and Z3 Investment LLC.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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