8-K: Current report filing
Published on August 26, 2009
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: August 20, 2009
(Date of earliest event
reported)
NOVELOS
THERAPEUTICS, INC.
(Exact name of registrant as
specified in its charter)
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Delaware
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333-119366
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04-3321804
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(State or other
jurisdiction
of incorporation)
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(Commission
File Number)
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(IRS Employer
Identification
Number)
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One
Gateway Center, Suite 504
Newton,
MA 02458
(Address of principal executive
offices)
(617)
244-1616
(Registrant's telephone number,
including area code)
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 (see General Instruction A.2. below):
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¨
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Written communications pursuant
to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting material pursuant
to Rule 14a-12 under
the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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ITEM
1.01
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ENTRY
INTO A MATERIAL DEFINITIVE
AGREEMENT
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WARRANT
EXCHANGE
On August
21, 2009, Novelos Therapeutics, Inc. (“Novelos or we”) entered into exchange
agreements with certain accredited investors who held warrants to purchase
6,947,728 shares of our common stock. Pursuant to the exchange
agreements, we issued an aggregate of 2,084,308 shares of our common stock in
exchange for these warrants. The holders agreed not to transfer or
dispose of the shares of common stock until February 18, 2010.
These
warrants had been issued in March 2006 in connection with a private placement of
our common stock, had an expiration date of March 7, 2011 and were exercisable
at a price of $1.82 per share. Following the exchange, warrants
expiring on March 7, 2011 to purchase a total of 5,432,120 shares of our common
stock at $1.82 per share remained outstanding.
SALE OF
COMMON STOCK AND WARRANT
Securities
Purchase Agreement
On August
25, 2009, we entered into a Securities Purchase Agreement (the
“Purchase Agreement”) with Purdue Pharma, L.P. (“Purdue”) to sell 13,636,364
shares of our common stock, $0.00001 par and warrants to purchase 4,772,728
shares of our common stock at an exercise price of $0.66, expiring December 31,
2015, for an aggregate purchase price of $9,000,000 (the
“Financing”). Pursuant to the Purchase Agreement, we sold Purdue
5,303,030 shares of common stock and a warrant to purchase 1,856,062 shares of
common stock at $0.66 per share for approximately $3,500,000 (the “Initial
Closing”). The sale of the remaining common stock and warrants will
be completed in one or more subsequent closings subject to the availability of
additional authorized shares of our common stock and the satisfaction of certain
customary closing conditions.
Pursuant
to the Purchase Agreement, Purdue shall have the exclusive right to negotiate
with Novelos for the license or other acquisition of NOV-002 Rights (as defined)
in the United States (the “US License”) from the date of the Initial Closing
until Purdue receives the Data and Analysis (as defined) related to our Phase 3
clinical trial in non-small cell lung cancer (the “Exclusive Negotiation
Period”). If, during the Exclusive Negotiation Period, Purdue and
Novelos agree on terms for the US License, as set forth in a definitive
agreement, Novelos shall grant Purdue an option to enter into such definitive
agreement within 30 days after the expiration of the Exclusive Negotiation
Period. If Novelos and Purdue do not agree to terms on a US License
during the Exclusive Negotiation Period, Purdue shall be entitled to the right
of first refusal (the “Right of First Refusal”) on bona fide offers for a US
License received from third parties. Under the Right of First
Refusal, Novelos will be required to communicate to Purdue the terms of any such
offers received and Purdue will have 30 days to enter into a definitive
agreement with Novelos on the same economic terms to Novelos as provided in the
third-party offer. The Right of First Refusal terminates upon
specified business combinations, occurring after the Exclusive Negotiation
Period. The Right of First Refusal will terminate if Purdue fails to
purchase shares of our common stock at a subsequent closing or the parties do
not complete subsequent closings by the end of the Exclusive Negotiation
Period. Novelos has separately entered into letter agreements
with Mundipharma International Corporation Limited and its independent
associated company providing for a conditional exclusive right to negotiate
for and a conditional right of first refusal with respect to, NOV-002 Rights for
Latin America, Mexico and Canada.
Purdue will have the right to either
designate one member to Novelos’ board of directors (the “Board”) or designate
an observer to attend all meetings of the Board, committees thereof and access
to all information made available to members of the Board. This right
shall last until such time as Purdue or its independent associated companies no
longer hold at least one-half of the common stock purchased pursuant to the
Purchase Agreement and no longer hold at least one-half of the Series E
Preferred Stock issued to them on February 11, 2009. Purdue also has the right
to participate in future equity financings in proportion to their pro rata
ownership of common and preferred stock.
Common
Stock Purchase Warrant
The
common stock purchase warrant has an exercise price of $0.66 and expires on
December 31, 2015. The warrant exercise price and/or the number of
shares of common stock issuable pursuant to such warrant will be subject to
adjustment for stock dividends, stock splits or similar capital reorganizations
so that the rights of the warrant holders after such event will be equivalent to
the rights of warrant holders prior to such event.
Registration
Rights Agreement
As part
of this transaction, we entered into a registration rights agreement with
Purdue. The registration rights agreement requires us to file with
the Securities and Exchange Commission no later than 5 business days following
the earlier of the six-month anniversary of (i) the Final Subsequent Closing or
(ii) the end of the Exclusive Negotiation Period (the “Filing Deadline”), a
registration statement covering the resale of all the shares of common stock
issued pursuant to the Purchase Agreement and all shares of common stock
issuable upon exercise of the warrants issued to pursuant to the Purchase
Agreement. We are required to use our best efforts to have the registration
statement declared effective and keep the registration statement continuously
effective under the Securities Act until the earlier of the date when all the
registrable securities covered by the registration statement have been sold or
the second anniversary of the closing. In the event we fail to file
the registration statement timely, we will be required to pay Purdue liquidated
damages equal to 1.5% per month (pro-rated on a daily basis for any period of
less than a full month) of the aggregate purchase price of the common stock and
until we file the delinquent registration statement. We will be
allowed to suspend the use of the registration statement for not more than 15
consecutive days or for a total of not more than 30 days in any 12 month
period. In the event that the any sale or issuances of common stock
and warrants pursuant to the Purchase Agreement occur after the Filing Deadline,
we will be required to file a registration statement covering the registrable
securities issued within 5 business days following the three-month anniversary
of the issuance.
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ITEM
3.02
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UNREGISTERED
SALES OF EQUITY SECURITIES
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As
described in Item 1.01, under “WARRANT EXCHANGE”, on August 21, 2009, we issued
2,084,308 shares of common stock (the “Exchange Shares”) in exchange for
outstanding warrants to purchase 6,947,728 shares of common
stock. The issuance was made pursuant to exchange agreements with
each warrant holder. The issuance of the Exchange Shares was exempt
from registration under the Securities Act by virtue of Section 3(a)(9)
thereof.
As
described in Item 1.01 under “SALE OF COMMON STOCK AND WARRANT”, on August 25,
2009 we sold Purdue 5,303,030 shares of common stock and warrant expiring on
December 31, 2015 to purchase 1,856,062 shares of common stock at $0.66 per
share for gross proceeds of approximately
$3,500,000. This sale was exempt from registration under the
Securities Act of 1933 by virtue of Section 4(2) thereof.
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ITEM
5.03
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AMENDMENTS
TO ARTICLES OF INCORPORATION OR
BYLAWS
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Effective
August 20, 2009, our by-laws were amended in order to implement required notice
periods and a protocol for calling shareholder meetings and addressing
shareholder proposals. A copy of the amended by-laws is filed as Exhibit 3.1 and
is incorporated herein by reference.
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ITEM
7.01
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REGULATION
FD DISCLOSURE
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Copies of
the press releases issued by us on August 24, 2009 and August 26, 2009
announcing the transactions described in Item 1.01 are filed as Exhibits 99.1
and 99.2 and are incorporated by reference.
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ITEM
9.01
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FINANCIAL
STATEMENTS AND EXHIBITS
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(c)
Exhibits
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Number
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Title
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3.1
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Amended
and restated By-laws
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10.5
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Form
of Warrant Exchange Agreement dated August 21, 2009
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99.1
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Press
Release dated August 24, 2009 entitled “Novelos Therapeutics Completes
Warrant Tender”
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99.2
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Press
Release dated August 26, 2009 entitled “Novelos Therapeutics Announces $9
Million Private
Placement”
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SIGNATURE
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.
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Dated:
August 26, 2009
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NOVELOS
THERAPEUTICS, INC.
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By:
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/s/
Harry S. Palmin
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Harry
S. Palmin
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President
and Chief Executive
Officer
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EXHIBIT
INDEX
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Number
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Title
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3.1
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Amended
and restated By-laws
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10.5
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Form
of Warrant Exchange Agreement dated August 21, 2009
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99.1
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Press
Release dated August 24, 2009 entitled “Novelos Therapeutics Completes
Warrant Tender”
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99.2
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Press
Release dated August 26, 2009 entitled “Novelos Therapeutics Announces $9
Million Private Placement”
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