Item 8.01. Other Events.
As previously disclosed, on August 11, 2020, Cellular Biomedicine Group, Inc.
(the "Company" or "CBMG"), a Delaware corporation, entered into a definitive
merger agreement (the "Merger Agreement") with CBMG Holdings, an exempt company
with limited liability incorporated under the laws of the Cayman Islands
("Parent"), and CBMG Merger Sub Inc., a Delaware corporation and a wholly-owned
subsidiary of the Parent ("Merger Sub"), pursuant to which Merger Sub will be
merged with and into the Company (the "Merger"), with the Company surviving the
Merger as a wholly owned subsidiary of Parent.
In connection with the Merger, the Company and Parent filed a joint voluntary
declaration (the "Declaration") under Section 721 of the Defense Production Act
of 1950, as amended ("DPA"), with the Committee on Foreign Investment in the
United States ("CFIUS"). CFIUS accepted the Declaration on August 27, 2020.
On October 21, 2020, the Company and Parent filed a joint notice under the DPA
with CFIUS that was accepted on October 28, 2020. CFIUS conducted a
45-calendar-day review, at the end of which it commenced an additional
45-calendar day investigation of the Merger, pursuant to the DPA.
On January 28, 2021, following the CFIUS review and investigation, the Company
and Parent received written notice from CFIUS that it had concluded its review
of the Merger and there were no unresolved national security concerns associated
with the Merger.
Receipt of CFIUS clearance satisfies one of the remaining conditions to the
closing of the transaction contemplated by the Merger Agreement. The Merger
remains subject to receipt of stockholder approval and other customary closing
conditions.
As previously disclosed, the Company will hold a special meeting of the
stockholders on February 8, 2021 at 9:00 a.m. Eastern time, at 9605 Medical
Center Drive, Suite 100, 1st floor, Rockville, Maryland 20850, at which the
Company's stockholders will be asked to consider and vote on, among other
things, the proposal to adopt the Merger Agreement and authorize and approve the
transactions contemplated thereby, including the Merger. Stockholders of record
as of the close of business, Eastern time, on December 18, 2020 will be entitled
to vote at the special meeting and any adjournment thereof.
The Company's board of directors (without the participation of Tony (Bizuo) Liu,
Darren O'Brien and Hansheng Zhou, who abstained from voting given their
relationships with Parent), acting upon the unanimous recommendation of the
special committee formed by the board of directors, has approved the Merger
Agreement, and the transactions contemplated thereby, including the Merger, and
recommended that the Company's stockholders vote in favor of the adoption of the
Merger Agreement.
The Company continues to target completion of the Merger in February 2021.
However, there can be no assurances regarding the timing or likelihood of the
satisfaction of the remaining closing conditions and the consummation of the
Merger.
Forward Looking Statements
Statements in this communication relating to plans, strategies, specific
activities, and other statements that are not descriptions of historical facts,
including our statements regarding the completion of the Merger and targeted
timing, are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking information is inherently subject to risks and
uncertainties, and actual results could differ materially from those currently
anticipated due to a number of factors, which include any risks detailed from
time to time in CBMG's reports filed with the Securities and Exchange
Commission, Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and
Current Reports on Form 8-K, including risks relating to the impact of the
COVID-19 pandemic on our operations, including risks associated with the
evolving COVID-19 pandemic and actions taken in response to it. Such statements
are based on the current beliefs and expectations of the management of CBMG and
are subject to significant risks and uncertainties outside of CBMG's control.
These risks and uncertainties include the possibility that the anticipated
benefits from the proposed transaction will not be realized, or will not be
realized within the expected time periods; the occurrence of any event, change
or other circumstances
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that could give rise to termination of the Merger Agreement; the failure of
CBMG's stockholders to adopt the Merger Agreement; operating costs, customer
loss and business disruption (including, without limitation, difficulties in
maintaining relationships with employees, customers, clients or suppliers) may
be greater than expected following the announcement of the proposed transaction;
the retention of certain key employees at CBMG; risks associated with the
disruption of management's attention from ongoing business operations due to the
proposed transaction; the risk that a condition to closing the transaction may
not be satisfied on a timely basis or at all; the risk that the proposed
transaction fails to close for any other reason; the outcome of any legal
proceedings related to the proposed transaction; the parties' ability to meet
expectations regarding the timing and completion of the proposed transaction;
the impact of the proposed transaction on the Company's credit rating; and other
risks described in CBMG's Annual Reports on Form 10-K, Quarterly Reports on Form
10-Q, and Current Reports on Form 8-K filed with the SEC. Given these
uncertainties, you should not place undue reliance on these forward-looking
statements, which speak only as of the date hereof. Except as otherwise required
by law, CBMG does not undertake any obligation, and expressly disclaims any
obligation, to update, alter or otherwise revise any forward-looking statements,
whether written or oral, that may be made from time to time, whether as a result
of new information, future events or otherwise.
Additional Information
This communication may be deemed to be solicitation material in respect of the
proposed acquisition of CBMG. In connection with the proposed transaction, CBMG
has filed relevant materials with the SEC, including a proxy statement in
preliminary and definitive form, in connection with the solicitation of proxies
from CBMG's stockholders for the proposed transaction, and CBMG and certain
other persons, including Parent, have filed a Schedule 13E-3 transaction
statement with the SEC. The Company first mailed the definitive proxy statement
to stockholders entitled to vote at the special meeting on or about December 31,
2020. BEFORE MAKING A VOTING DECISION, STOCKHOLDERS OF CBMG ARE URGED TO READ
THE PROXY STATEMENT AND OTHER RELEVANT DOCUMENTS, CAREFULLY AND IN THEIR
ENTIRETY BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT CBMG, THE PROPOSED
TRANSACTION AND RELATED MATTERS. Stockholders may obtain free copies of the
proxy statement and other documents that CBMG files with the SEC through the
website maintained by the SEC at www.sec.gov. Copies of the documents filed with
the SEC by CBMG are also available free of charge on CBMG's website at
https://www.cellbiomedgroup.com or by directing a request to Cellular
Biomedicine Group, Inc., Attn: Sarah Kelly, Investor Relations or by calling
(301) 825 5320.
Participants in the Solicitation
CBMG and certain of its directors, executive officers and employees may be
deemed to be participants in the solicitation of proxies from CBMG's
stockholders in connection with the proposed transaction. Information regarding
the ownership of CBMG securities by CBMG's directors and executive officers is
included in their SEC filings on Forms 3, 4 and 5, and additional information
about CBMG's directors and executive officers is also available in CBMG's proxy
statement for its 2020 annual meeting of stockholders filed with the SEC on
April 29, 2020 and is supplemented by other filings made, and to be made, with
the SEC by CBMG. Additional information regarding persons who may be deemed
participants in the solicitation of proxies from CBMG's stockholders in
connection with the proposed transaction, including a description of their
respective direct or indirect interests, by security holdings or otherwise, has
been included in the proxy statement described above. These documents are or
will be available free of charge as described above.
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