Form 8-K - Current report

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): January 18, 2024

ORGENESIS INC.

(Exact name of registrant as specified in its charter)

Nevada

001-38416

98-0583166

(State or other jurisdiction

(Commission File

(IRS Employer

of incorporation

Number)

Identification No.)

20271 Goldenrod Lane, Germantown, MD 20876

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (480) 659-6404

Not Applicable

(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:

☐	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))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock		ORGS		The Nasdaq Capital Market

Indicate by check mark whether the registrant is an emerging growth company as defined in in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b -2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01 Entry into a Material Definitive Agreement.

Term Sheet for the Acquisition of MM OS Holdings, L.P. Interests in Octomera LLC

On January 18, 2024, Orgenesis Inc. (the “Company”) entered into a binding Term Sheet with MM OS Holdings L.P. (the “Seller”), an affiliate of Metalmark Capital Partners, for the acquisition by the Company from the Seller of 3,670,324 Class A Preferred Units of the Company’s subsidiary Octomera LLC (“Octomera”), which constitute all of the equity interests of Octomera that are owned by the Seller (the “Acquisition”). In consideration for such Acquisition, the Seller and the Company shall agree to the following consideration (the “Consideration”):

	(1)	Monitoring Agreement: The advisory services and monitoring agreement between Octomera and Metalmark Management II LLC shall be terminated as of the closing of the Acquisition (the “Closing”), and all unpaid amounts as of the Closing shall be deemed cancelled.
	(2)	Seller Loans: The outstanding loans payable from Orgenesis Maryland LLC to Seller shall be amended and extended in a mutually agreeable manner to reflect a maturity of 10 years from the Closing, with extensions as mutually agreed and the maturity to be accelerated upon a change of control of Octomera or the Company.
	(3)	Royalty: 5% of Net Revenue of the Business of Octomera excluding revenues of Orgenesis Gmbh and Tissue Genesis International LLC (“Excluded Assets”) for a period of four years from the Closing (as defined in the original agreements). At the option of the Company, at any point during such four year period, the Company may buy out the remaining royalty stream for $40 million of consideration consisting of cash and/or equity in a ratio determined by the Company.
	(4)	Milestone: If the Company sells Octomera within five years from the date of the Closing at a price that is more than $40 million excluding consideration for Excluded Assets, the Company shall pay the Seller 5% of the net proceeds. If there is a change of control of the Company within five years from Closing, and the portion of the purchase price allocable to Octomera excluding consideration for Excluded Assets is more than $40 million, the Company shall pay the Seller 5% of the net proceeds allocable to Octomera. The allocation of purchase price for purposes of this milestone payment shall be done in good faith by the Company and subject to standard dispute resolutions between the parties.
	(5)	Ownership Claims. Seller will settle all outstanding ownership claims of Octomera (e.g. Octomera options granted to any services providers), such that at Closing, the entire equity and ownership interests of Octomera will belong to the Company.

The Seller members of the Board of Managers of Octomera shall resign after execution of the Term Sheet (and in any event, prior to Closing) and the Octomera LLC operating agreement shall be revised and amended to provide for a single member LLC.

Upon execution of the Term Sheet, the parties agreed to promptly negotiate, in good faith, the terms of definitive agreements in connection with such Term Sheet in order to consummate the Acquisition.

Upon Closing, Octomera shall assume and, within 90 days of Closing, pay Seller’s reasonable legal expenses associated with the transaction contemplated by the Term Sheet, up to a cap of $300,000.

The foregoing summary of the Term Sheet does not purport to be complete and is subject to, and qualified in its entirety by, such document attached as Exhibit 10.1 to this Current Report on Form 8-K, which is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

The exhibit listed in the following Exhibit Index is filed as part of this Current Report on Form 8-K.

Exhibit No.		Description
10.1		Term Sheet, dated as of January 18, 2024, between the Company and MM OS Holdings L.P.

104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

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.

	ORGENESIS INC.

Date: January 24, 2024	By:	/s/ Victor Miller
		Victor Miller
		Chief Financial Officer, Treasurer and
		Secretary

Exhibit 10.1

NON-BINDING TERM SHEET

for the

ACQUISITION OF MM OS HOLDINGS L.P. INTERESTS IN

OCTOMERA LLC

January 18, 2024

Seller	MM OS Holdings L.P. (the “Seller”)

Purchaser	Orgenesis Inc. (the “Purchaser”)

Target Companies	Octomera LLC and its Subsidiaries (the “Target”, and together with the Purchaser and the Seller, the “Parties”)

Consideration	As consideration for the acquisition by the Purchaser from the Seller of 3,670,324 Class A Preferred units of the Target which constitute all of the equity interests of the Target that are owned by the Seller (the “Acquisition”), the Purchaser shall agree to the following consideration (the “Consideration”):

	(1)	Monitoring Agreement: The advisory services and monitoring agreement between Target and Metalmark Management II LLC shall be terminated as of the Closing, and all unpaid amounts as of the closing shall be deemed cancelled.
	(2)	Seller Loans: The outstanding loans payable from Orgenesis Maryland to Seller shall be amended and extended in a mutually agreeable manner to reflect a maturity of 10 years from the Closing, with extensions as mutually agreed and the maturity to be accelerated upon a change of control of Target or Purchaser.
	(3)	Royalty: 5% of Net Revenue of the Business excluding revenues of Orgenesis Gmbh and Tissue Genesis International LLC (“Excluded Assets”) for a period of 4 years from Closing (as defined in the original agreements). At the option of the Purchaser, at any point during such 4 year period, the Purchaser may buy out the remaining royalty stream for $40 million of consideration consisting of cash and/or equity in a ratio determined by the Purchaser.
	(4)	Milestone: If the Purchaser sells the Target within 5 years from the date of the closing at a price that is more than $40 million excluding consideration for Excluded Assets, the Purchaser shall pay the Seller 5% of the net proceeds.

If there is a change of control of Purchaser within 5 years from Closing, and the portion of the purchase price allocable to Target excluding consideration for Excluded Assets is more than $40 million, the Purchaser shall pay the Seller 5% of the net proceeds allocable to Target. The allocation of purchase price for purposes of this milestone payment shall be done in good faith by the Purchaser and subject to standard dispute resolutions between the parties.

(5)

Seller will settle all outstanding ownership claims of Target (e.g. Target options granted to any services providers, such that at Closing, the entire equity and ownership interests of Target will belong to Purchaser.

Conditions Precedent

The following will be conditions precedent to the closing of the transaction (the “Closing”), which the parties contemplate occurring on January 18^th, 2024:

(1) The parties shall have executed all required Definitive Agreements.

(2) The Board of Directors of Orgenesis shall have approved the Acquisition.

(3) There will be no significant impairment of Target’s business operations between the date of this term sheet and Closing.

Post-Closing Operations	The Definitive Agreements shall include customary covenants of Purchaser concerning: i) Any restructuring by Purchaser resulting in a reduction in the value of the Seller’s economic interest. For clarity, cost restructuring is not prohibited., and ii) all business associated with Target will be conducted in all material respects by Target (meaning that Purchaser will not have related operations to the Target in subsidiaries outside of Target post-closing), unless deemed necessary at Purchaser’s sole discretion for the successful operating of Target. Purchaser shall otherwise fully control and be responsible for all operations of Target post-Closing, and shall timely pay payroll obligations of Orgenesis Maryland LLC at January month end. For the avoidance of doubt, Purchaser understands that, from and after the date of this Term Sheet, Seller does not expect to extend additional funding or financing to Octomera.

Security	Seller shall relinquish all security encumbrances against Purchaser, Target and any other affiliates of either entity.

Board of Octomera	The Seller members of the Board of Managers of the Target shall resign after execution of this Term Sheet (and in any event, prior to Closing) and the operating agreement shall be revised to provide for a single member LLC.

Definitive Agreements	Upon execution of this Term Sheet, the Parties shall promptly negotiate, in good faith, the terms of definitive agreements in connection herewith in order to consummate the Acquisition (the “Definitive Agreements”). The Definitive Agreements will be in a form customary for transaction of this type. The parties will cooperate in providing each other with all documentation to complete the diligence in a timely manner. For the avoidance of doubt, all Seller preferences and controls will be cancelled.

Fees & Expenses	Each of the Parties shall bear its own expenses in connection with this Term Sheet and the negotiation of the Definitive Agreements in the event the Closing does not occur. Upon Closing, Target shall assume and, within 90 days of Closing, pay Seller’s legal expenses (to Davis Polk & Wardwell) associated with the transaction contemplated by this term sheet, up to a cap of $300,000. Notwithstanding anything to the contrary, Target will not bear any of the Fees and Expenses related to the Blair fundraising unless mutually agreed upon by the Parties.

Confidentiality; Publicity	Each Party hereto acknowledges and confirms that this Term Sheet and all terms hereof are confidential and, subject to applicable law, that neither its existence nor the terms hereof will be disclosed to any other person other than Parties’ officers, directors, employees and advisors. Any public announcement relating to the Acquisition shall be agreed upon by the Parties in advance and in writing.

Notices	All notices and other communications hereunder shall be in writing and shall be furnished to the other Parties hereto by hand delivery or registered or certified mail or electronic transmission (e-mail) at the respective addresses of the Parties as set forth on the signature page hereof. Any such notice shall be considered to have been delivered to the other Parties: (i) if delivered by hand or electronic transmission, when actually delivered; or (ii) 7 (seven) days after being mailed by certified or registered mail.

Governing Law	This Term Sheet shall be governed by the laws of the State of New York.

Taxes	Seller shall bear all the tax liabilities relating to its holdings of Target including but not limited to its share of partnership taxes from 2022.

Severability	If any term, provision, covenant or restriction contained in this Term Sheet is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions contained in this Term Sheet shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

Counterparts	This Term Sheet may be executed in any number of counterparts, and by facsimile or scanned signature, each of which when executed and delivered shall constitute an original of this Term Sheet, but all the counterparts shall together constitute the same Term Sheet. No counterpart shall be effective until each party has executed at least one counterpart.

Term and Termination	This Term Sheet shall expire at end of the day January 16th.

[Signature page follows]

[Signature Page to Term Sheet for Asset Purchase and Investment]

The authorized representatives of the Parties have signed this non-binding Term Sheet as of January 15, 2024.

Orgenesis Inc.			MM OS Holdings L.P.

by:			by:
name:			name:
title:			title:

Acknowledged and Agreed

Octomera LLC

by:
name:
title:

Cover	Jan. 18, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Jan. 18, 2024
Entity File Number	001-38416
Entity Registrant Name	ORGENESIS INC.
Entity Central Index Key	0001460602
Entity Tax Identification Number	98-0583166
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	20271 Goldenrod Lane
Entity Address, City or Town	Germantown
Entity Address, State or Province	MD
Entity Address, Postal Zip Code	20876
City Area Code	480
Local Phone Number	659-6404
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock
Trading Symbol	ORGS
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false