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): February 22, 2017 (January 12, 2017)
| AMERICAN BRIVISION (HOLDING) CORPORATION |
| (Exact name of registrant as specified in its charter) |
| Nevada | 333-91436 | 26-0014658 | ||
|
(State
or other jurisdiction
of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
11 Sawyers Peak Drive
Goshen, NY 10924
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (845) 291-1291
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 ( see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ 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 January 12, 2017, American BriVision Corporation (the “ Company ”, “ we ” or “ us ”) entered into an Addendum (the “ Addendum ”) to the Collaborative Agreement (the “ Collaborative Agreement ”) which was previously entered into with BioLite Inc. (“ BioLite ”)on December 29, 2015 as amended May 6, 2016. Pursuant to the Collaborative Agreement, BioLite granted us sole licensing rights for drug and therapeutic use of five products: BLI-1005 CNS-Major Depressive Disorder; BLI-1008 CNS-Attention Deficit Hyperactivity Disorder; BLI-1401-1 Anti-Tumor Combination Therapy-Solid Tumor with Anti-PD-1; BLI-1401-2 Anti-Tumor Combination Therapy-Triple Negative Breast Cancer; and BLI-1501 Hematology-Chronic Lymphocytic Leukemia (the “ Five Products ”), in USA and Canada.
Pursuant to the Addendum, BioLite and weagreed to:
| 1) | Include one more product, namely, “Maitake Combination Therapy” as one of the Products defined in the Collaborative Agreement (the “ Sixth Product’ ); |
| 2) | Define the Territoryof the Sixth Product to be worldwide and restate the Territory of the Five Products to be USA and Canada; |
| 3) | The ownership of any clinical trial data and Intellectual Property as defined in Collaborative Agreement shall belong to us. We shall pay for all clinical trials and other expenses associated with all clinical trial charges and shall have the right to sublicense Five Products in the USA and Canada and the Sixth Product worldwide; |
| 4) | Confirm there is no additional Milestone Payments as defined in paragraph 3 of the Collaborative Agreement will be made with respect to the Sixth Product; |
| 5) | In the case that BioLite is obligated to pay its licensor in excess of 3% of the net sales, BioLite and we shall renegotiate and increase the Royalty Charge to a percentage to be later agreed from its original amount of 5% of the net sales as defined in paragraph 4 of the Collaborative Agreement. |
The foregoing descriptions of the Addendum are summaries and are qualified in their entirety by reference to such document, which is filed herewith as Exhibits 99.1 and is incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
Pursuant to the Collaborative Agreement, we are obligated to make the second installment payment of $6,500,000 (the “ Second Payment ”), which is 6.5% of total payments due under the Collaborative Agreement, upon the first IND submission by BioLite.
On February 22, 2017, we agreed to pay the Second Payment to BioLite with $650,000 in cash and$5,850,000 in the form of newly issued shares of our common stock, at the price of $2.0 per share, for an aggregate number of 2,925,000 shares (the “ Shares ”). The Shares were issued pursuant to Section 4(a)(2) of the 1933 Securities Act, as amended.
Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
On February 21, 2017, our management, after consultation with the Company’s independent registered public accounting firm, Centurion ZD CPA Limited, (“ Centurion ”) concluded, that the following previously filed financial statements of the Company should not be relied upon:
| (i) | The Company’s unaudited financial statements for the quarter ended March 31, 2016 contained in the Company’s Quarterly Report on Form 10-Q, originally filed with the Securities and Exchange Commission (“ SEC ”) on May 16, 2016; |
| (ii) | The Company’s unaudited financial statements for the quarter ended June 30, 2016 contained in the Company’s Quarterly Report on Form 10-Q, originally filed with the SEC on August 15, 2016; |
| (iii) | The Company’s audited financial statements for Annual Report on Form 10-K for the fiscal year ended September 30, 2016, originally filed on January 12, 2017. |
| 2 |
The conclusion relates to the correction of the errors principally related to accrual of $6,500,000 of payable and related expense as set forth in the Collaborative Agreement in the consolidated financial statements, and revises the disclosure of related parties transactions and commitments and contingencies.
We noted that there was a delay of accrual for the two payments in total of $10,000,000 as set forth in the Collaborative Agreement : 1) 3.5% of total payment related to the upfront payment shall be made upon the execution of the Collaborative Agreement; and 2) 6.5% of the total payment shall be made upon the first IND submission (which was submitted in March 2016). We restated the consolidated financial statements in order to record the related liability and expense in the correct period, as well as providing necessary revision for the footnotes of related parties transactions and commitments and contingencies to reflect a more accurate disclosure.
Our board of directors discussed the restatement with Centurion.
The following tables present the effect of the correction discussed above and other adjustments on selected line items of our previously reported consolidated financial statements as of and for the period ended March 31, 2016, June 30, 2016 and September 30, 2016, respectively.
| As of and for the Period Ended March 31, 2016 | ||||||||||||
|
Previously Reported |
Adjustments | Restated | ||||||||||
| Consolidated Statements of Balance Sheets | ||||||||||||
| Due to related party | - | 10,000,000 | 10,000,000 | |||||||||
| Accumulated deficit | (425,749 | ) | (10,000,000 | ) | (10,425,749 | ) | ||||||
|
Consolidated Statements of Operations and Comprehensive Loss |
||||||||||||
| For the three months ended March 31, 2016 | ||||||||||||
|
Research and development expenses |
- | 6,500,000 | 6,500,000 | |||||||||
| Net Loss | (108,712 | ) | (6,500,000 | ) | (6,608,712 | ) | ||||||
| Basic and diluted loss per share | (0.00 | ) | (0.03 | ) | (0.03 | ) | ||||||
| For the six months ended March 31, 2016 | ||||||||||||
| Research and development expenses | - | 10,000,000 | 10,000,000 | |||||||||
| Net Loss | (110,147 | ) | (10,000,000 | ) | (10,110,147 | ) | ||||||
| Basic and diluted loss per share | (0.00 | ) | (0.05 | ) | (0.05 | ) | ||||||
| 3 |
| As of and for the Period Ended June 30, 2016 | ||||||||||||
| Previously Reported | Adjustments | Restated | ||||||||||
| Consolidated Statements of Operations and Comprehensive Loss | ||||||||||||
| Prepayment | 3,500,000 | (3,500,000 | ) | - | ||||||||
| Due to related party | - | 6,500,000 | 6,500,000 | |||||||||
| Accumulated deficit | (669,207 | ) | (10,000,000 | ) | (10,669,207 | ) | ||||||
| Consolidated Statements of Operations and Comprehensive Loss | ||||||||||||
| For the nine months ended June 30, 2016 | ||||||||||||
| Research and development expenses | - | 10,000,000 | 10,000,000 | |||||||||
| Net Loss | (352,769 | ) | (10,000,000 | ) | (10,352,769 | ) | ||||||
| Basic and diluted loss per share | (0.00 | ) | (0.05 | ) | (0.05 | ) | ||||||
As of and for the Fiscal Year ended September 30, 2016
| Previously Reported | Adjustments | Restated | ||||||||||
| Consolidated Statements of Operations and Comprehensive Loss | ||||||||||||
| Due to related party | - | 6,500,000 | 6,500,000 | |||||||||
| Accumulated deficit | (4,823,401 | ) | (6,500,000 | ) | (11,323,341 | ) | ||||||
|
Consolidated Statements of Operations and Comprehensive Loss |
||||||||||||
| Research and development expenses | - | 10,000,000 | 10,000,000 | |||||||||
| Net Loss | (4,507,799 | ) | (9,999,940 | ) | (11,007,739 | ) | ||||||
| Basic and diluted loss per share | (0.00 | ) | (0.06 | ) | (0.06 | ) | ||||||
We have made these adjustments by filing with the SEC amendments to the above referenced reports which, in each case, included restated consolidated financial statements and notes thereto, and other appropriate revisions to reflect the foregoing.
| 4 |
Item 9.01 Exhibits
| Exhibit 99.1 | Addendum to the Collaborative Agreement dated January 12, 2017 |
| 5 |
SIGNATURES
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.
| American BriVision(Holding) Corporation | ||
| Date: February 22, 2017 | By: | /s/ Eugene Jiang |
| Eugene Jiang | ||
| Chief Executive Officer and Chairman | ||
6
Exhibit 99.1
ADDENDUM
This ADDENDUM (this “ Addendum ”) dated January 12 th , 2017 (the “ Effective Date ”) to the Collaborative Agreement dated December 29, 2015 (as amended hereby, the “ Agreement ”) by and between BioLite, Inc., a company incorporated under the laws of Taiwan and having its principal place of business at 3rd Floor, 248, Nei-Hu Road, Sec. l , Taipei, 11493 Taiwan (“ BioLite ”) and American BriVision Corporation, a Delaware corporation having its principle place of business at 11, Sawyer Park Drive, Goshen, New York 10294 USA (“ ABVC ”). BioLite and ABVC are thereafter referred to as the “ Parties ”.
WHEREAS , the Parties desire to amend the Agreement;
NOW, THEREFORE , the Parties, in consideration of the mutual promises herein contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, hereby agree to amend the Agreement as follows:
| 1. | Amendments to the Agreement : |
1.1 The Agreement is hereby amended to add the following as a “ Product ” on page 1 of the Agreement:
“6. Maitake Combination Therapy for indications including but not limited to the following: breast cancer, brain tumor, hepatocellular carcinoma, pancreatic cancer, renal cell carcinoma, nasopharyngeal carcinoma, prostate cancer, cervix cancer, oral/ pharynx/larynx cancer, lung cancer, leukemia, myeloma, lymphoma, gastric cancer, thyroid cancer, esophageal cancer, gastric cancer, small intestine cancer, large intestine/colon/rectal cancer, ovary cancer, skin cancer, head and neck, soft tissue sarcoma, bone tumor, bladder cancer, and cholangiocarcinomab.”
1.2 Paragraph 1.6 of the Agreement is hereby amended and restated in its entirety as follows:
“l .6 “ Territory ” shall mean:
| (A) | North America (U.S. and Canada), for BLI-1005, BLI-1008, BLI-1401-1, BLI-1401-2, and BLI-1501; and |
| (B) | Worldwide, for Product number 6 identified in this Agreement.” |
1.3 Paragraph 2 of the Agreements is hereby amended and restated in its entirety as follows:
| (A) | BioLite hereby grants sole licensing rights to ABVC, in the Field and in the Territory under the Intellectual Property, Confidential Information, Data and Trademark, to develop Product. | |
| (B) | Any clinical trial data and Intellectual Property conduct and generate in the territory solely belong to ABVC. |
| (C) | ABVC will pay all clinical trials and other expenses generate in the territory. | |
| (D) | ABVC has the right to sublicense all products in the territory. |
1.4 Paragraph 3 of the Agreement is hereby amended to add the following Paragraph 3.3 after Paragraph 3.2 and all of its sub-paragraphs:
“3.3 For the avoidance of doubt, no additional milestone payments will be made with respect to the Product numbered 6.”
1.5 Paragraph 4 of the Agreement is hereby amended and restated in its entirety to read as follows:
“4. Royalty Charge: 5% of the net sales, provided, however, that if at any given time BioLite is obligated to pay its licensor amounts in excess of 3% of such net sales, the Parties will adjust the Royalty Charge as mutually agreed between the Parties.”
| 2 | Effectiveness of Agreement . Except as expressly amended by this Addendum , the provisions of the Agreement shall remain in full force and effect. |
| 3 | Counterparts . This Addendum may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, but all of which counterparts together shall constitute but one and the same instrument. This Addendum shall become effective on the Effective Date. Delivery of an executed counterpart of a signature page to this Agreement, any amendments, waivers, consents or supplements, by facsimile or other electronic transmission (including a .pdf copy sent by e-mail) shall be deemed to constitute an original and fully effective signature of such party. |
IN WITNESS WHEREOF the Parties hereto have caused this Addendum to be executed, in duplicate, each Party taking a copy, as of the date first written above.
| BIOLITE, INC. | AMERICAN BRIVISION CORPORATION | |||
| By: | /s/ Frank Liu | By: | /s/ Kira Huang | |
| Frank Liu | Kira Huang | |||
| Supervisor | CFO | |||
| Date:1/12/2017 | Date:1/12/2017 | |||