Athersys, Inc. (NASDAQ:ATHX) Files An 8-K Entry into a Material Definitive Agreement

Athersys, Inc. (NASDAQ:ATHX) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.

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The Warrant provides for an extension of the term from September1, 2020 in a limited circumstance. The Warrant also provides that the number of Warrant Shares to be issued thereunder will be limited to the extent that Healios and its affiliates would beneficially own more than 19.9% of our outstanding common stock after giving effect to such exercise and issuance.

Item 1.01. Unregistered Sales of Equity Securities.

The information contained above in Item 1.01 regarding the Securities Purchase Agreement and the issuance of the Shares, the Warrant and the Warrant Shares is hereby incorporated by reference into this Item 1.01.

The issuance of the Shares and the Warrant and the Warrant Shares that may be issued from time to time to Healios under the Warrant are exempt from registration under the Securities Act, to the exemption for transactions by an issuer not involving any public offering under Section4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder.

On March13, 2018, Athersys and Healios entered into a binding letter of intent (the “LOI”) to expand Healios’ license to develop MultiStem products. Under the terms of the LOI, Athersys and Healios will work to execute the agreements necessary to expand the existing collaboration, including a Collaboration Expansion Agreement (the “Collaboration Expansion Agreement”), the form of which is attached as an exhibit to the LOI; however, Athersys and Healios are not obligated to enter into the Collaboration Expansion Agreement. If the Collaboration Expansion Agreement is entered into, Healios would (i)expand its license to include acute respiratory distress syndrome (including idiopathic pulmonary fibrosis (“ARDS”)) and trauma in Japan, and use of MultiStem worldwide for organ buds for all organ diseases, (ii)obtain a worldwide exclusive license for use of MultiStem product to treat certain ophthalmological indications, (iii)obtain an exclusive option to a license to develop and commercialize MultiStem products for ischemic stroke, ARDS and trauma in China, and (iv)obtain certain other rights. In exchange, if the Collaboration Expansion Agreement is entered into, Athersys would be entitled to receive payments of $35million, as well as additional possible payments, including milestones and royalties. If the Collaboration Expansion Agreement is entered into and thereafter Healios elects to exercise its option for the license in China, Healios would pay Athersys license fees, milestone payments and escalating royalties or profit-sharing for each indication.

Under the binding terms of the LOI, Athersys and Healios are obligated to enter into an escrow agreement, which was entered into on March13, 2018. Healios is obligated under the terms of the escrow agreement to fund $10,000,000 (the “Escrow Amount”) into an escrow account, which is expected to occur in the near term. The Escrow Amount will be paid to Athersys no later than May1, 2018 as either (i)the initial portion of the $35million in payments associated with the execution of the Collaboration Expansion Agreement or (2)if Collaboration Expansion Agreement is not executed on or before April30, 2018, payment for expanding the scope of the existing license to include ARDS and certain ophthalmological indications in Japan and use of MultiStem worldwide for organ buds for all organ diseases.

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About Athersys, Inc. (NASDAQ:ATHX)

Athersys, Inc. is an international biotechnology company that is focused primarily in the field of regenerative medicine. The Company’s MultiStem cell therapy, an allogeneic stem cell product, is its lead platform product and is in later-stage clinical development. Its clinical development programs are focused on treating neurological conditions, cardiovascular disease, inflammatory and immune disorders, certain pulmonary conditions and other conditions where the standard of care is limited or inadequate for many patients. In the neurological area, the Company evaluated in a completed Phase II trial, the potential for MultiStem treatment of patients with a history of neurological damage from an ischemic stroke. The Company initiated a Phase II clinical study in the United States for the administration of MultiStem cell therapy to patients with a history of an acute myocardial infarction, or AMI.

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