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) July
21, 2005
ADVENTRX
Pharmaceuticals, Inc.
(Exact
name of registrant as specified in its charter)
Delaware
(State
or
other jurisdiction of incorporation)
|
001-32157
(Commission
File Number)
|
|
84-1318182
(IRS
Employer Identification No.)
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6725
Mesa Ridge Road, Suite 100
San
Diego, California 92121
(Address
of principal executive offices) (Zip Code)
(858)
552-0866
(Company’s
telephone number, including area code)
Items
1.01 and 3.02. Entry into a Material Definitive Agreement; Unregistered Sales
of
Equity Securities.
On
July
21, 2005, the Company entered into a Securities Purchase Agreement with Icahn
Partners LP, Icahn Partners Master Fund LP, High River Limited Partnership,
Viking Global Equities LP, VGE III Portfolio Ltd., North Sound Legacy
Institutional Fund LLC, North Sound Legacy International Ltd. and the Royal
Bank
of Canada (the “Purchase Agreement”) for the sale of 10,810,809 shares of Common
Stock at a purchase price of $1.85 per share (the “Shares”) for aggregate gross
proceeds of $19,999,996.65, and the issuance of warrants to purchase 10,810,809
shares of Common Stock at an exercise price of $2.26 per share (the “Warrants”).
The Shares and the shares of Common Stock issuable upon exercise of the Warrants
have not been registered under the Securities Act of 1933 (the “Securities Act”)
in reliance upon the exemption from registration provided by Section 4(2)
of the
Securities Act and Regulation D promulgated under that section, which exempts
from registration issuances to accredited investors as defined in Regulation
D
where the offering is not a public offering.
Placement
Agents.
CIBC
World Markets and RBC Capital Markets served as lead placement agents
in
connection with the transaction. RBC Capital Markets is an agent of purchaser
Royal Bank of Canada. Burnham
Hill Partners, a division of Pali Capital, Inc., also served as a placement
agent. The placement agents received an aggregate of $1,599,999.73 in
cash fees in connection with this financing.
Warrants.
The
Warrants have a seven-year term. However, if prior to the expiration date
there
occurs a merger, consolidation or other corporate transaction that results
in a
change of control, then (i) if the consideration to be received in the change
of
control is cash, the Warrants will terminate at the time of the change of
control and the holder will be entitled to receive the difference (if positive)
between the amount per share paid in the change of control and the exercise
price, and (ii) if the consideration received in the change of control is
other
property (or a combination of cash and other property), then either the acquirer
must make provisions to assume the Warrant or, if desired, the Warrant can
be
terminated upon payment of a premium to the holder (with the amount of such
premium being based on the value of the change of control consideration,
as set
forth in the Warrant). No Warrant is exercisable for six months after issuance.
The Warrant exercise price is subject to proportional adjustment in the event
of
a stock dividend, stock split or reverse stock split applicable to the Common
Stock, and the number of shares of Common Stock acquirable on exercise of
the
Warrants will likewise be adjusted proportionately.
Registration
Statement.
The
Company is required to file a resale registration statement on Form S-3 within
45 days after the closing of the transaction to register the resale of the
Shares and the shares of Common Stock issuable upon exercise of the Warrants
(collectively, the “Registrable Securities”). If the Company fails to file a
registration statement on Form S-3 within such time period or such registration
statement is not declared effective within 90 days after closing, the Company
will be liable for certain liquidated damages on an escalating basis as set
forth in the Purchase Agreement. The Company will be required to keep the
registration statement effective until such time as all of the Registrable
Securities may be sold under Rule 144(k) of the Securities Act or all of
the
Registrable Securities have been sold.
Rights
Agreement.
In the
Purchase Agreement, the Company agreed to enter into a Rights Agreement upon
the
closing of the transaction (the “Rights Agreement”) with Icahn Partners LP,
Icahn Partners Master Fund LP, High River Limited Partnership, Viking Global
Equities LP and VGE III Portfolio Ltd. (collectively, the “Rights Investors”).
In the Rights Agreement, the Company will agree to the following:
| · |
to
grant the Rights Investors the right to consent to any issuance
of
securities by the Company at a per share price lower than the Warrant
exercise price for up to one year, with certain enumerated
exceptions;
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| · |
to
grant the Rights Investors the right to participate in sales of
securities
for the next seven years, with certain enumerated exceptions set
forth in
the Rights Agreement, including the right to purchase (i) up to
50% of
securities sold in a public offering if the offering price is equal
to or
below $8.00 per share, (ii) up to 20% of the securities sold in
a public
offering if the offering price is above $8.00 per share, and (iii)
up to
50% of the securities sold in a private offering.;
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| · |
to
obtain stockholder approval of any change of control transaction;
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| · |
to
expand the size of the Board of Directors by one member and appoint
a
nominee of the Rights Investors. Thereafter, for so long as the
Rights
Investors hold the participation rights described above, the Company
will
nominate a nominee selected by them to the Company’s Board of Directors;
and
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| · |
not
to adopt any rights plan designed to prevent a hostile takeover
or adopt a
classified Board of Directors for so long as the Rights Investors
hold the
participation rights described above. The Company will hold a special
meeting of stockholders to submit these proposals as amendments
to its
Certificate of Incorporation. In addition to the Rights Investors,
stockholders holding approximately 9,000,000 shares of Common Stock
have
agreed to vote in favor of such
amendments.
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Lock-Up
Agreements.
In
connection with the private placement, the executive officers and directors
of
the Company entered into “lock-up agreements” with CIBC World Markets in which
they agreed not to sell any of their shares of Common Stock of the Company,
or
securities convertible into Common Stock, for 90 days after the effective
date
of the registration statement on Form S-3,
provided, however, that they may sell if the per share price is at least
$4.00.
Outstanding
Securities.
Following the closing of the transactions described herein, the Company will
have 65,933,730 shares of Common Stock outstanding. In addition, the Company
will be obligated to issue 20,762,698 shares of Common Stock pursuant to
outstanding warrants and 2,942,000 shares of Common Stock pursuant to
outstanding stock options to employees, directors and consultants.
The
press
release issued by the Company on July 22, 2005 with respect to this matter
is
included with this report as an exhibit.
This
description is not a complete description of all of the terms of the financing
and is qualified in its entirety by reference to the agreements entered into
in
connection with the financing, which will be included as exhibits on the
Company’s next quarterly report on Form 10-Q.
Item
9.01. Financial Statements and Exhibits.
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(c)
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The
exhibit list required by this item is incorporated by reference
to the
Exhibit Index filed as part of this
report.
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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.
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ADVENTRX
Pharmaceuticals, Inc.
By:
/s/
Evan M.
Levine
Name:
Evan M. Levine
Title:
President and Chief Executive Officer
July 27, 2005
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EXHIBIT
INDEX
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Exhibit
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Description
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99.1
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Press
Release of the Company dated July 22, 2005.
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