Sec Form 13D Filing - HEALIOS K.K. filing for ATHERSYS INC (ATHX) - 2020-04-02

Randy S. Laxer, Esq. Morrison & Foerster LLP

Shin-Marunouchi Building, 29th Floor 5-1, Marunouchi 1-Chome Chiyoda-ku, Tokyo 100-6529

Japan 011-81-3-3214-6522

Jeffrey Bell, Esq. Morrison & Foerster LLP

250 West 55th Street

New York, NY 10019-9601 (212) 468-8000

The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

Name of reporting persons:

HEALIOS K.K.

Check the appropriate box if a member of a group

(a)  ☐        (b)  ☐

SEC use only

Source of funds:

WC

Check box if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e)

☐

Citizenship or place of organization:

Japan

Number of

shares

beneficially

owned by

each

reporting

person

with

Sole Voting Power:

0

Shared Voting Power:

16,000,000

Sole dispositive power:

0

Shared dispositive power:

9.4%⁽¹⁾

Aggregate amount beneficially owned by each reporting person:

16,000,000

Check box if the aggregate amount in Row (11) excludes certain shares

☐

Percent of class represented by amount in Row (11):

9.4%

Type of reporting person:

CO

Based on 165,829,189 shares of Common Stock (as defined below) outstanding as of March 20, 2020, per a notification received by Healios from the Issuer dated March 24, 2020, and the 4,000,000 shares exercised by Healios pursuant to its Warrant, as further described in Item 4 below.

Name of reporting persons:

Tadahisa Kagimoto⁽²⁾

Check the appropriate box if a member of a group

(a)  ☐        (b)  ☐

SEC use only

Source of funds:

AF

Check box if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e)

☐

Citizenship or place of organization:

Japan

Number of

shares

beneficially

owned by

each

reporting

person

with

Sole Voting Power:

0

Shared Voting Power:

16,000,000

Sole dispositive power:

0

Shared dispositive power:

9.4%⁽³⁾

Aggregate amount beneficially owned by each reporting person:

16,000,000

Check box if the aggregate amount in Row (11) excludes certain shares

☐

Percent of class represented by amount in Row (11):

9.4%

Type of reporting person:

IN

The reporting person may be deemed to have beneficial ownership of shares of Common Stock (as defined below) solely through his interest in HEALIOS K.K.

Based on 165,829,189 shares of Common Stock outstanding as of March 20, 2020, per a notification received by Healios from the Issuer dated March 24, 2020, and the 4,000,000 shares exercised by Healios pursuant to its Warrant, as further described in Item 4 below.

For up to 4,000,000 shares of Common Stock, initially exercisable during the period starting on the later of (i) the date on which the Collaboration Agreement was entered into and (ii) the date on which a $10,000,000 payment from Healios to Athersys, previously held in escrow as contemplated by the LOI and by a separately executed escrow agreement, was released to Athersys, through September 1, 2020. Under the First Warrant Amendment, Healios’s satisfaction of its first payment obligation under the Collaboration Agreement also became a condition to the exercisability of this tranche. The exercise price for such shares is the greater of $1.76 and 110% of the average closing price per share of Common Stock for the 10 trading days immediately preceding (but not including) the date the Warrant is exercised (the “Reference Price”).

For up to 6,000,000 shares of Common Stock, initially from and following the date on which Healios makes its initial payment under the Collaboration Agreement, and pursuant to the First Warrant Amendment additionally conditioned on Healios and Athersys entering into either (i) a license for Healios to use Athersys’s or its affiliates’ intellectual property rights relating to MultiStem products in China or (ii) an option agreement for such license, in either case by September 1, 2018 (the “China License Condition”). Upon vesting, this tranche of the warrant may be exercised as follows:

Term

Acquirable Shares

Exercise Price

Jun. 1, 2018 – Dec. 31, 2018

Sept. 1, 2018 – Mar. 31, 2019

Jan. 1, 2019 – Jun. 30, 2019

Apr. 1, 2019 – Sept. 30, 2019

For up to 10,000,000 shares of Common Stock, initially from and following the date on which Healios makes its initial payment under the Collaboration Agreement, and pursuant to the First Warrant Amendment additionally conditioned on the China License Condition. Upon vesting, this tranche of the warrant may be exercised as follows:

Term

Exercise Price

Jun. 1, 2018 – Aug. 31, 2018

Sept. 1, 2018 – Nov. 30, 2018

Dec. 1, 2018 – Feb. 28, 2019

Mar. 1, 2019 – May 31, 2019

Jun. 1, 2019 – Aug. 31, 2019

Sept. 1, 2019 – Nov. 30, 2019

Dec. 1, 2019 – Feb. 29, 2020

Mar. 1, 2020 – Sept. 1, 2020

Healios may be deemed to have (i) beneficial ownership (within the meaning of Rule 13d-3 under the Act), (ii) shared power to vote or direct the vote of, and shared power to dispose or direct the disposition of, up to 16,000,000 shares of Common Stock, representing approximately 9.4% of such class, and (iii) sole power to vote or direct the vote of, and sole power to dispose or direct the disposition of, no shares of Common Stock. The information contained in Item 4 to this Schedule 13D is herein incorporated by reference.

Mr. Kagimoto may be deemed, solely through his interest in Healios, to have (i) beneficial ownership (within the meaning of Rule 13-d3 under the Act), (ii) shared power to vote or direct the vote of, and shared power to dispose or direct the disposition of, the shares of Common Stock identified in the response pertaining to Healios immediately above, and (iii) sole power to vote or direct the vote of, and sole power to dispose or direct the disposition of, no shares of Common Stock. The information contained in Item 4 to this Schedule 13D is herein incorporated by reference.

Mr. Gregory A. Bonfiglio may be deemed to have (i) beneficial ownership (within the meaning of Rule 13-d3 under the Act), (ii) shared power to vote or direct the vote of, and shared power to dispose or direct the disposition of, up to 922,156 shares of Common Stock, representing approximately 0.5% of such class, and (iii) sole power to vote or direct the vote of, and sole power to dispose or direct the disposition of, no shares of Common Stock.