Item 1.01
Entry Into a Definitive Material Agreement.
On April 8,
2020, Bio-Matrix Scientific Group, Inc., a Delaware corporation (“Bio-Matrix” or “Parent”),
Rivulet Films, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”), and Rivulet
Films LLC, an Arizona limited liability company (the “Target”), entered into an Agreement and Plan of Merger
(the “Merger Agreement”), pursuant to which, subject to the terms and conditions therein, the Target shall
be merged with and into Merger Sub (the “Merger”) and the separate existence of the Target shall cease. Following
the effective time of the Merger, Merger Sub shall continue as the surviving corporation of the Merger (the “Surviving
Corporation”). It is intended that the Merger qualify as a tax free reorganization within the meaning of Section 368(a)
of the Internal Revenue Code of 1986, as amended. The Merger is anticipated to close on April 10, 2020, but there is no assurance
this will occur.
Upon its terms
and subject to the conditions set forth in the Merger Agreement, at the effective time of the Merger (i) all equitable interests
of the Target (“Target Equity”) then outstanding shall be converted into the right to receive 82,155,765 shares
of common stock of Parent, $0.0001 par value per share (“Shares”), to be distributed pro rata to the members
of the Target, and (ii) each share of common stock, $0.0001 par value per share, of Merger Sub then outstanding shall effectively
remain one share of common stock of the Surviving Corporation. Holders of Target Equity will receive cash in lieu of fractional
shares, if applicable.
Each of Bio-Matrix,
Merger Sub, and the Target have agreed to customary representations, warranties, and covenants in the Merger Agreement, including,
among others, covenants relating to (i) the conduct of the Target’s business during the period between execution of the
Merger Agreement and the effective time of the Merger, (ii) non-solicitation by the Target of alternative acquisition proposals,
(iii) the Target’s obligation to obtain the approval of holders of Target Equity to effect the transactions contemplated
by the Merger Agreement, and (iv) Parent’s obligation to use commercially reasonable efforts to cause the Shares to be issued
in the Merger pursuant to the Merger Agreement to be approved for trading (subject to official notice of issuance) on the OTC
Pink Market.
Consummation
of the Merger is subject to certain closing conditions, including, among others, (i) the accuracy of the representations and warranties
made and the performance in all material respects of the covenants set forth in the Merger Agreement, (ii) approval of the Merger
Agreement by the holders of a majority of the then outstanding Target Equity, (iii) the obtaining of any required consents, and
(iv) the absence of a material adverse effect with respect to the Target.
The Merger Agreement
contains certain termination rights for both Parent and the Target. All fees and expenses incurred in connection with the Merger
Agreement will be paid by the party incurring such expenses, whether or not the Merger is consummated.
The
preceding summary does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which
is filed as Exhibit 2.1 to this Current Report on Form 8-K and which is incorporated herein by reference. The
Merger Agreement has been attached as an exhibit to this Current Report on Form 8-K to provide investors and securityholders
with information regarding its terms. It is not intended to provide any other factual information about Bio-Matrix or to modify
or supplement any factual disclosures about Bio-Matrix in its public reports filed with the SEC. The Merger Agreement includes
representations, warranties, and covenants of Bio-Matrix, Merger Sub, and the Target made solely for the purpose of the Merger
Agreement and solely for the benefit of the parties thereto in connection with the negotiated terms of the Merger Agreement. Investors
should not rely on the representations, warranties, and covenants in the Merger Agreement or any descriptions thereof as characterizations
of the actual state of facts or conditions of the parties or any of their respective affiliates. Moreover, certain of those representations
and warranties may not be accurate or complete as of any specified date, may be subject to a contractual standard of materiality
different from those generally applicable to SEC filings, or may have been used for purposes of allocating risk among the parties
to the Merger Agreement, rather than establishing matters of fact. The Merger Agreement should not be read alone, but should instead
be read in conjunction with the other information regarding the parties or any of their respective affiliates, as well as in the
Forms 10-K, Forms 10-Q, and other filings that Bio-Matrix makes with the SEC.