NeoStem, Inc. – ‘8-K’ for 11/13/07

On:  Monday, 11/19/07, at 5:24pm ET   ·   For:  11/13/07   ·   Accession #:  1157523-7-11472   ·   File #:  1-33650

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Current Report   —   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Neostem, Inc. 8-K                                      6     25K 
 2: EX-10.1     Material Contract                                     17     62K 
 3: EX-10.2     Material Contract                                     18     74K 
 4: EX-10.3     Material Contract                                     10     50K 

8-K   —   Neostem, Inc. 8-K
Document Table of Contents

8-K
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 UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 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): November 13, 2007

 NEOSTEM, INC.
(Exact name of registrant as specified in its charter)

   Delaware                        0-10909                  22-2343568
(State or Other Jurisdiction    (Commission File Number)       (IRS Employer    
    of Incorporation)                                        Identification No.)

420 Lexington Avenue, Suite 450                                           
  New York, New York                                           10170
--------------------------------------------------------------------------------
(Address of principal executive offices)                          (Zip Code)    

Registrant's telephone number, including area code: (212) 584-4180

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))                                               

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Item 1.01.  Entry into a Material Definitive Agreement.                         

     On November 13, 2007,  the Company  entered into an  acquisition  agreement
with UTEK Corporation ("UTEK") and Stem Cell Technologies,  Inc., a wholly-owned
subsidiary  of UTEK  ("SCTI"),  pursuant to which the Company  acquired  all the
issued  and  outstanding  common  stock of SCTI in a  stock-for-stock  exchange.
Pursuant to a license agreement (the "License  Agreement")  between SCTI and the
University of Louisville Research Foundation  ("ULRF"),  SCTI owns an exclusive,
worldwide license to a technology  developed by researchers at the University of
Louisville to identify and isolate rare stem cells from adult human bone marrow,
called VSELs (very small  embryonic  like) stem cells.  Concurrent with the SCTI
acquisition, NeoStem entered into a sponsored research agreement (the "Sponsored
Research Agreement" or "SRA") with ULRF under which NeoStem will support further
research in the laboratory of Mariusz  Ratajczak,  M.D., Ph.D., a co-inventor of
the VSEL  technology  and head of the Stem  Cell  Biology  Program  at the James
Graham Brown Cancer Center at the University of  Louisville.  SCTI was funded by
UTEK in amounts  sufficient  to pay  certain  near-term  costs under the License
Agreement and the SRA. In consideration for the acquisition,  the Company issued
to UTEK 400,000  unregistered  shares of its common stock,  par value $0.001 per
share for all the issued and outstanding  common stock of SCTI. The value of the
transaction is estimated to be $940,000.                                        

     VSELs have many  characteristics  typically  found in embryonic stem cells,
including the ability to differentiate into specialized cells found in different
types of tissue that would be able to interact with the specific  organ in order
to repair  degenerated,  damaged or  diseased  tissue (the three "Ds" of aging).
NeoStem has the ability to harvest and cryopreserve  these VSELs from individual
patients, setting the stage for their use in personalized regenerative medicine.
If VSELs can be expanded from individual patients and their potential to develop
into  different  types  of  tissue  cells  maintained,   it  would  represent  a
significant step toward  overcoming the two major limitations in the development
of stem cell therapies  today,  the ethical  dilemma  regarding use of embryonic
stem cells and the  immunological  problems  associated  with using cells from a
third party donor.                                                              

     Under the License Agreement, SCTI agrees to engage in a diligent program to
develop  the  VSEL  technology  with the goal of  public  utilization  resulting
therefrom.  SCTI has the right to sublicense  the VSEL  technology in accordance
with the terms of the  License  Agreement.  It further  sets  forth the  parties
rights and obligations  with regard to patent  prosecution,  including that SCTI
will take the lead in connection therewith.  Certain license fees, royalties and
milestone  payments  are to be paid to ULRF  from  SCTI in  connection  with the
acquisition and development of the VSEL technology,  and SCTI is responsible for
all payments for patent filings and related applications.  The License Agreement
also contains certain provisions relating to "stacking,"  permitting SCTI to pay
royalties  to ULRF at a  reduced  rate in the event it is  required  to also pay
royalties to third parties exceeding a specified  threshold for other technology
in  furtherance  of the  exercise  of its patent  rights or the  manufacture  of
products  using the VSEL  technology.  ULRF retained the right under the License
Agreement to license and practice the VSEL Technology for noncommercial purposes
only, such as education,  academic  research,  teaching and public service,  and
also  retained  the right of  publication  subject  to  certain  confidentiality
limitations.  The License Agreement contains  confidentiality and other standard
provisions,  limits ULRF liability and provides for  indemnification of ULRF and
to the extent  allowed by law,  indemnification  of SCTI,  and requires  SCTI to
maintain certain minimum insurance levels.                                      

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     The License  Agreement,  which was entered  into on November  12, 2007 as a
condition to the acquisition, has a term of twenty years, and may continue to be
in effect for a longer  period of time if a valid claim under a patent or patent
pending  application  covered  thereby  still  exists.  SCTI can  terminate  the
agreement  for any reason upon 60 days' prior written  notice,  and either party
can  terminate the  agreement  upon 30 days' prior  written  notice upon certain
uncured  material   breaches  of  the  agreement  or  immediately  upon  certain
bankruptcy  related  events.  Additionally,  portions  of  the  license  may  be
converted to a  non-exclusive  license if SCTI does not  diligently  develop the
VSEL Technology or terminated entirely if SCTI chooses to not pay for the filing
and  maintenance  of any patents  thereunder.  Upon  termination  of the License
Agreement for any reason, certain obligations of the parties survive for periods
of time including confidentiality,  limitation of liability and indemnification,
insurance obligations, accrued royalty reporting and accounting.                

     The  License  Agreement  also  contemplates  that the Company and ULRF will
enter into an adult stem cell  collection  center  agreement.  Pursuant  to this
agreement,  stem  cells  would be  provided  to Dr.  Ratajczak's  laboratory  in
connection  with the  performance of the research  under the Sponsored  Research
Agreement and certain of SCTI's diligence obligations with respect to developing
the VSEL Technology commence upon receipt of these cells.                       

     Concurrently  with the  License  Agreement,  the Company  entered  into the
Sponsored  Research  Agreement with ULRF.  Pursuant to the SRA, the Company will
support additional research relating to the VSEL technology to be carried out in
the laboratory of Mariusz Ratajczak,  M.D., Ph.D. as principal  investigator,  a
co-inventor of the VSEL  Technology and head of the Stem Cell Biology Program at
the James Graham Brown Cancer Center at the University of Louisville. In return,
the Company will receive the first option to negotiate a license to the research
results.  The  prior  funding  of SCTI by UTEK  will  pay for a  portion  of the
research costs.                                                                 

     Under the Sponsored Research  Agreement,  the Company agrees to support the
research as set forth in a research  plan in an amount of  $375,000.  Such costs
are to be paid by the Company in accordance  with a payment  schedule which sets
forth the timing and  condition  of each such  payment over the term of the SRA.
Under the SRA, ULRF retains the rights to intellectual property developed by its
employees in performance of the research relating to the VSEL Technology and the
Company  and  ULRF  jointly  own  intellectual  property  developed  jointly  by
employees of ULRF and the Company in performance of the research. So long as the
Company  continues  to support  and fund the filing of patent  applications  and
other intellectual  property  protection for the same, the Company has the first
option to negotiate for an  exclusive,  worldwide  commercial  license to ULRF's
interest in any such developed or jointly developed  intellectual  property. The
SRA also establishes rates for royalties and revenue sharing between the parties
in the event no license agreement is executed with regard to joint  intellectual
property but one party chooses to develop or license it to a third party.       

     The term of the research is two and one-half years and shall commence after
all  applicable  institution  (e.g.,  institutional  review  board  ("IRB")) and
Federal  approvals are obtained and upon the adult stem cell specimens  required
for the research being provided to the laboratory.                              

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     The SRA further sets out the parties respective rights and responsibilities
relating to patent prosecution, contains confidentiality provisions, limits ULRF
liability and provides for  indemnification  of ULRF. Either party may terminate
the SRA if Dr.  Ratajczak is unable to perform the  research  and an  acceptable
successor is not available, or if required approval of a review committee at the
University of  Louisville or ULRF is not given or is withdrawn.  The Company may
terminate  the SRA upon 90 days'  written  notice to ULRF and  either  party may
terminate the SRA on 30 days' written notice in the event of uncured defaults or
breaches. Upon termination of the SRA for any reason, certain obligations of the
parties  survive  including   confidentiality,   disclosure,   rights  regarding
publications and ownership of intellectual property.                            

CAUTION REGARDING FORWARD-LOOKING STATEMENTS                          

     Certain statements in this Form 8-K constitute "forward-looking statements"
within the meaning of the Private Securities  Litigation Reform Act of 1995. For
this purpose,  any statements  contained  herein that relate to future events or
conditions,  including without  limitation,  statements  regarding our financial
position,   potential,  business  strategy,  plans  and  objectives  for  future
operations, may be deemed to be forward-looking statements. All such statements,
which are all  statements  other  than of  historical  fact,  involve  risks and
uncertainties. These statements are commonly identified by the use of such terms
and phrases as "intends,"  "expects,"  "anticipates,"  "estimates,"  "seeks" and
"believes." Additionally, statements concerning our ability to develop the adult
stem cell business,  the future of  regenerative  medicine and the role of adult
stem cells in that  future,  the  future use of adult stem cells as a  treatment
option and the role of VSELs in that future, and the potential revenue growth of
such  business are  forward-looking  statements.  Our ability to enter the adult
stem cell arena and future  operating  results are dependent  upon many factors,
including but not limited to: (i) our ability to obtain sufficient  capital or a
strategic business  arrangement to fund our expansion plans; (ii) our ability to
build the management and human resources and infrastructure necessary to support
the growth of our business;  (iii) competitive  factors and developments  beyond
our control;  (iv) scientific and medical  developments beyond our control;  (v)
our inability to obtain  appropriate  state licenses or any other adverse effect
or limitations caused by government regulation of the business; (vi) whether any
of the Company's current or future patent applications result in issued patents;
and (vii) other risk factors  discussed in the Company's  periodic  filings with
the  Securities  and  Exchange  Commission  which are  available  for  review at
www.sec.gov  under  "Search for Company  Filings."  We cannot  guarantee  future
results or  achievements,  and readers are cautioned not to place undue reliance
on these  forward-looking  statements,  which speak only as of the date  hereof.
Except as required by law, the Company  undertakes  no  obligation to update any
forward-looking  statements,  whether  as a result  of new  information,  future
events or otherwise.                                                            

Item 3.02  Unregistered Sales of Equity Securities                              

     On November 13, 2007,  the Company  effected the issuance of 400,000 shares
of  its  unregistered  common  stock,  par  value  $0.001  per  share,  to  UTEK
Corporation  in connection  with the  acquisition of SCTI described in Item 1.01
above.                                                                          

     The offer and sale by the Company of the  securities  described  above were
made in reliance upon the exemption from  registration  provided by Section 4(2)
of  the  Securities  Act  of  1933,  as  amended  (the  "Securities  Act"),  for
transactions by an issuer not involving a public offering. The offer and sale of
such  securities  were made without  general  solicitation  or advertising to an
"accredited  investor,"  as such term is defined in Rule 501(a) of  Regulation D
promulgated under the Securities Act.                                           

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Item 9.01. Financial Statements and Exhibits.                                   

(d)     Exhibits.                                                               
---------                                                       

Exhibit 10.1    Agreement and Plan of Acquisition among NeoStem, Inc., Stem Cell
Technologies, Inc. and UTEK Corporation.        

Exhibit 10.2    License Agreement between Stem Cell Technologies, Inc. and the  
      University of Louisville Research Foundation, Inc. (1)

Exhibit 10.3    Sponsored Research Agreement between NeoStem, Inc. and the      
      University of Louisville Research Foundation, Inc. (2)

-------------                                                                   
(1)  Certain  portions  of Exhibit  10.2 were  omitted  based upon a request for
     confidential treatment, and the omitted portions were filed separately with
the Securities and Exchange Commission on a confidential basis.       
(2)  Certain  portions  of Exhibit  10.3 were  omitted  based upon a request for
     confidential treatment, and the omitted portions were filed separately with
the Securities and Exchange Commission on a confidential basis.       

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 SIGNATURE

     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.                                           

             NEOSTEM, INC.

                          By: /s/ Catherine M. Vaczy
                              ----------------------
                          Catherine M. Vaczy
                                          Vice President and General Counsel

Dated: November 19, 2007                                                        

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Filed on:		11/19/07		6					None on these Dates
For Period End:		11/13/07		1		4
		11/12/07		3
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