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):  August 18, 2009

Brainstorm Cell Therapeutics Inc.
(Exact name of registrant as specified in its charter)

Delaware
   
333-61610
   
20-8133057
(State or other jurisdiction of incorporation)
   
(Commission File No.)
   
(IRS Employer Identification No.)
 
110 East 59 th 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:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o 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 August 18, 2009, Brainstorm Cell Therapeutics Inc. (the “Company”) entered into an amendment to a subscription agreement (the “Amendment”), dated as of July 31, 2009, with ACCBT Corp. (the “Investor”), a company under the control of Mr. Chaim Lebovits, the President of the Company, pursuant to which the Company and the Investor agreed to amend the Subscription Agreement, dated as of July 2, 2007 (the “Subscription Agreement”).

Under the terms of the Subscription Agreement, the Investor was no longer obligated to invest any further amounts in the Company.  The Investor agreed to invest an additional $1,000,000 in the Company, and, in return, the Company agreed to amend the Subscription Agreement to, among other things, reprice all of the Subscription Shares (as defined below) from $0.1818 to $0.12 to reflect the new market price per share of the Company and to reduce the exercise price of the Last Warrant (as defined below) and any future warrants from $0.36 to $0.29. The share price as of closing on August 21, 2009 was $0.061.

The Amendment amended the Subscription Agreement to, among other things: (i) decrease the purchase price per share of the up to 27,500,000 shares (the “Subscription Shares”) of the Company’s common stock, $0.00005 par value per share (the “Common Stock”), the Investor previously purchased or will purchase pursuant to the terms of the Subscription Agreement, as amended, from $0.1818 to $0.12 (the “Repricing”); (ii) adjust the number of shares of Common Stock issuable under the Subscription Agreement in accordance with the Repricing; (iii) extend the expiration date of all Warrants (as described below); (iv) amend the exercise price of certain of the Warrants from $0.36 to $0.29; and (v) revise the investment schedule of the purchase and sale of the Subscription Shares.   Pursuant to the Amendment, the Repricing retroactively applies to all Subscription Shares purchased by the Investor prior to the Amendment.

As previously disclosed, pursuant to the terms of the Subscription Agreement, the Company agreed to sell to the Investor the Subscription Shares for an aggregate subscription price of up to $5.0 million and for no additional consideration, if the Investor purchased the Subscription Shares, warrants to purchase up to 30,250,000 shares of Common Stock (the “Warrants”). Separate closings of the purchase and sale of the Subscription Shares and the Warrants were scheduled.  Under the Subscription Agreement, the Company was to deliver to the Investor a set number of Subscription Shares and Warrants, subject to customary closing conditions and the delivery of funds. Pursuant to the terms of the Subscription Agreement, the Warrants were to have the following exercise prices: (i) the first 10,083,333 Warrants issued would have an exercise price of $0.20; (ii) the next 10,083,333 Warrants issued would have an exercise price of $0.29; and (iii) the final 10,083,334 Warrants issued would have an exercise price of $0.36. Each Warrant issued pursuant to the Subscription Agreement would expire on November 5, 2011.

As of July 31, 2009, the Investor had purchased an aggregate of 22,289,586 shares of Common Stock (of which 3,039,586 have not yet been issued) for an aggregate purchase price of $4,052,652, and the following Warrants (the “Issued Warrants”) had been issued to the Investor: (i) 10,083,333 Warrants with an exercise price of $0.20; (ii) 10,083,333 Warrants with an exercise price of $0.29; and (iii) 1,008,334 Warrants (the “Last Warrant”) with an exercise price of $0.36.

Pursuant to the Amendment, the Investor agreed to purchase the remainder of the Subscription Shares, as adjusted, at an aggregate purchase price of $947,347 at a price per share of $0.12 in monthly installments of not less than $50,000 (with the last payment in an amount up to the maximum subscription price of $5.0 million) at closings to be held monthly beginning on August 1, 2009.

If the market price per share closes at or below $0.05 per share on any 5 consecutive trading days after the date of the Amendment, then the obligation of the Investor to purchase the remainder of the Subscription Shares shall terminate; however, the Investor may elect to continue to make investments under the Amendment.
 
 
 
 

Pursuant to the Amendment, the exercise price of the Last Warrant decreased from $0.36 to $0.29.  At the closing upon which the Investor shall have invested an aggregate of $4,250,000, the Company shall issue a Warrant to the Investor to purchase 3,529,166 shares of Common Stock at an exercise price of $0.29.  At the closing upon which the Investor shall have invested $5.0 million, the Company shall issue a Warrant to the Investor to purchase 4,537,500 shares of Common Stock at an exercise price of $0.29.  At the request of the Investor, the Company shall issue Warrants to the Investor proportionally with respect to the amounts invested by the Investor.

Pursuant to the Amendment, all of the Warrants, including the Issued Warrants, shall expire on November 5, 2013 instead of November 5, 2011.

Pursuant to the Amendment, the Investor is entitled to demand and piggyback registration rights, whereby the Investor may request, upon 10 days written notice, the Company to include within a registration statement to be filed with the Securities and Exchange Commission for the Investor’s resale of the Subscription Shares, as adjusted, and the shares of Common Stock issuable upon exercise of the Warrants.

In connection with the Repricing and the Amendment, the Company shall issue 9,916,667 shares of Common Stock to the Investor for no additional consideration in order to retroactively apply the Repricing.

Except as is modified by the Amendment, a description of the Subscription Agreement is incorporated herein by reference to Item 1.01 of the Company’s Current Report on Form 8-K dated July 2, 2007 (filed on July 5, 2007) (File No. 333-61610).  The foregoing description is subject to, and qualified in its entirety by, the Amendment filed as an exhibit hereto and incorporated herein by reference.

Item 3.02 Unregistered Sales of Equity Securities.

Item 1.01 is hereby incorporated by reference into this item.

The issuance of the securities described in Items 1.01 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 9.01 Financial Statements and Exhibits.

(d) The exhibits listed in the Exhibit Index below are filed with, or incorporated by reference in, this report.
 
 
 
 

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.
 
August 24, 2009
Brainstorm Cell Therapeutics Inc.
 
       
 
By:
/s/ Rami Efrati  
   
Rami Efrati
 
   
Chief Executive Officer
 
       
 
 
 
 
 
EXHIBIT INDEX
 
     
Exhibit No .
 
Description
     
10.1
 
Amendment to Subscription Agreement, dated as of July 31, 2009, by and between ACCBT Corp. and Brainstorm Cell Therapeutics, Inc.
     
99.1
 
Description of Subscription Agreement, dated July 2, 2007, is incorporated herein by reference to Item 1.01 of the Registrant’s Current Report on Form 8-K dated July 2, 2007 (filed on July 5, 2007) (File No. 333-61610).
 
 
 
 
Amendment
Made this 31st day of July, 2009
to the Subscription Agreement dated as of July 2 nd ,   2007 (the "Subscription Agreement") by and between ACCBT Corp., a corporation duly incorporated under the laws of the British Virgin Islands ( " ACCBT " ), and Brainstorm Cell Therapeutics Inc., a corporation duly incorporated under the laws of the State of Delaware, USA  ("Company").
 
Capitalized terms used in this Amendment shall have the meanings assigned to them in the Subscription Agreement.

WHEREAS, pursuant to the Subscription Agreement ACCBT was to invest up to $5 million in the aggregate in accordance with the provisions of the Subscription Agreement and to be issued in consideration thereof up to 27,500,000 Common Shares of the Company and receive Warrants to purchase up to an additional 30,250,0000 Common Shares of the Company in accordance with terms of the Warrants, and
 
WHEREAS, through the date hereof ACCBT has invested in the Company an aggregate amount of $4,052,652 in consideration for 22,289,586 Common Shares of the Company at a price per share of $0.1818 (the "Price Per Share") of which l9,250,000 Common Shares have been issued to ACCBT or on its behalf and an additional 3,039,586 are due to be issued, and received Warrants to purchase an additional 10,083,333 Common Shares in consideration for $0.20 per share, 10,083,333 Common Shares in consideration for $ 0.29 per share and 1,008,334 Common shares in consideration for $0.36 per share (the "Last Warrants"), and
 
WHEREAS, the parties agree that there has been a Material Adverse Effect on the Company and accordingly ACCBT is no longer required to invest any further amounts in the Company in accordance with the Subscription Agreement, and
 
WHEREAS, the Parties agree to amend the Subscription Agreement and the Warrants as set forth herein, and
 
WHEREAS, in connection with such amendments ACCBT agrees to invest the remaining amounts up to the Maximum Subscription Price as set forth herein.
 
NOW, THEREFORE, the parties hereto agree as follows:
 
1
Price Per Subscription Share. The Price Per Share of the Subscription Shares is hereby decreased from $0.1818 to $0.12. Accordingly, promptly following the signature hereof the Company shall adjust the number of Common Shares issuable pursuant to the Subscription Agreement retroactively and issue to ACCBT 9,916,667 Common Shares for no additional consideration from ACCBT. Whenever the Company proposes to file a registration statement (other than a registration statement on Form S-8 and Form S-4 and a registration statement covering shares to be sold solely for the account of other holders) at any time and from time to time, it will, prior to such filing, give written notice to ACCBT of its intention to do so; provided, that no such notice need be given if no registrable shares are to be included therein as a result of a determination of the managing underwriter. Upon the written request of ACCBT given within 10 days after the Company provides such notice (which request shall state the intended method of disposition of such registrable shares), the Company shall use its best efforts to cause up to 41,666,666 Common Shares which the Company has been requested by such stockholder to register to be registered under the Securities Act of 1933, as amended, to the extent necessary to permit their sale or other disposition in accordance with the intended methods of distribution specified in the request of such stockholder; provided that the Company shall have the right to postpone or withdraw any registration effected without obligation to ACCBT.
 
 
2
Investments by ACCBT. ACCBT shall invest the remaining amount up to the Maximum Subscription Price (i.e. $947,347) at a Price Per Share of $0.12, in monthly installments of not less than $50,000 (and the last payment up to the Maximum Subscription Price) at Closings to be held monthly starting on August 1, 2009. At the Closing upon which ACCBT shall have invested $4,250,000 in the aggregate, ACCBT shall be issued Warrants to purchase an additional 4,537,500 Common Shares in consideration for $0.29 per share and upon completion of the investments by ACCBT hereunder up to the Maximum Subscription Price, ACCBT shall be issued with Warrants to purchase an additional 4,537,500 Common Shares in consideration for $0.29 per share. At the request of ACCBT, the Company shall issue Warrants to ACCBT proportionally with respect to amounts that have been invested by ACCBT. The Company hereby instructs ACCBT to pay $50,000 to Ben Tzvi Travel on behalf of the Company. ACCBT shall be entitled to accelerate the Closings and/or to invest more than $50,000 at each Closing in its sole discretion and in the event that elects to do so, the number of Warrants to be issued at such Closing shall be adjusted accordingly.
 
3
ACCBT's Right to Cease Payments. Notwithstanding the foregoing, with respect to any payment, ACCBT shall have the right, to not make the next scheduled or any further payments on account of the Maximum Subscription Price (and, accordingly, the Company will not be required to issue any further Subscription Shares and Warrants), without incurring any liability in the event that following the date hereof the price per share of the Company as of the closing on any 5 consecutive trading days shall decrease to $0.05 (five cents). Upon such event, the Agreement (as amended hereunder) as it pertains to the transactions contemplated in connection with a subsequent Closing (and, at the election of ACCBT, also in connection with other or all subsequent Closings) shall terminate, whereupon the Company shall have no claim against or recourse to ACCBT and may not alter or cancel any of ACCBT's rights or obtain any compensation from ACCBT.
 
4
Amendment of Warrants. The terms of the Warrants shall be amended such that the exercise period of all of the Warrants shall be extended through November 5, 2013, and in addition the exercise price of the shares under the Last Warrants and the additional Warrants to be issued in connection with the investments by ACCBT hereunder, shall be $0.29 (instead of $0.36), and accordingly the Warrants to be issued under the Subscription Agreement and this Amendment shall be as follows: Warrants representing 10,083,333 Common Shares issuable upon exercise, the Exercise Price (as defined in the Warrant) shall be - $0.20 (twenty cents) per share; for such Warrants representing the next 20,166,667 Common Shares issuable upon exercise, the Exercise Price (as defined in the Warrant) shall be - $0.29 (twenty nine cents) per share.
 
 
5
Limited Amendment. Except as set forth herein, this Amendment shall not constitute a modification, acceptance or waiver of any other provision of the Subscription Agreement, or any right, power or remedy of any party under the Subscription Agreement. Except as amended hereby, all terms of the Agreement remain in full force and effect.
 
6
The provisions of Section 10 (Miscellaneous) of the Subscription Agreement shall apply to this Amendment as if set forth herein.
 
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as   of the day and year first above written.
 
 
ACCBT Corp.
 
Brainstorm Cell Therapeutic Inc.
By:
/s/ Chaim Lebovits
By:
/s/ Rami Efrati
Title:
CEO
Title:
CEO