Unassociated Document
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): August 11, 2010
AEOLUS PHARMACEUTICALS,
INC.
(Exact
name of registrant as specified in its charter)
Delaware
(State or
other jurisdiction of incorporation)
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0-50481
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56-1953785
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(Commission
File Number)
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(IRS
Employer Identification
No.)
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26361
Crown Valley Parkway, Suite 150
Mission
Viejo, California 92691
(Address
of Principal Executive Offices, Including Zip Code)
949-481-9825
(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:
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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. Entry
into a Material Definitive Agreement.
On August
11, 2010, Aeolus Pharmaceuticals, Inc. (the “Company”) entered into a Securities
Purchase Agreement (the "Purchase Agreement") with two accredited institutional
investors (the "Investors") pursuant to which the Company sold and
issued to the Investors in a private placement an aggregate of 2,500,000
units (the “Units”), comprised of an aggregate of 2,500,000 shares of common
stock (the “Common Stock”) of the Company (the “Shares”) and warrants to
purchase up to an aggregate of 1,875,000 additional shares of Common Stock (the
“Warrants”), with an initial exercise price of $0.50 per share, subject to
adjustment pursuant to the Warrants, with each Unit representing one share of
Common Stock and a Warrant to purchase 0.75 of one share of Common Stock, at a
purchase price of $0.40 per Unit for aggregate gross proceeds of $1,000,000
(collectively, the “Financing”). The Warrants are exercisable for a
seven-year period from their date of issuance; contain a “cashless exercise”
feature that allows the holder to exercise the Warrants without a cash payment
to the Company under certain circumstances; contain a dividend participation
right which allows the holder to receive any cash dividends paid on the Common
Stock without exercising the Warrant; contain a provision that provides for the
reduction of the exercise price to $0.01 in the event of any such payment of
cash dividends by the Company or upon a change of control; and contain
anti-dilution provisions in the event of a stock dividend or split, dividend
payment or other issuance, reorganization, recapitalization or similar
event. The Purchase Agreement and the form of Warrant are filed as
Exhibit 10.1 and Exhibit 10.2, respectively, to this Current Report on Form 8-K
and are incorporated herein by this reference.
The
Company also granted to the Investors the option to acquire, collectively, up to
an additional 2,500,000 additional Units (the “Additional Units”), comprised of
an aggregate of 2,500,000 shares of common stock of the Company and warrants to
purchase up to an aggregate of 1,875,000 additional shares of common stock at
the per Additional Unit purchase price of $0.40 (the “Call
Option”). In addition, the Investors granted to the Company the
option to require these Investors, severally and not jointly, to acquire up to
2,500,000 Additional Units, less any Additional Units acquired under the Call
Option, at the per Additional Unit purchase price of $0.40 (the “Put
Option”). The Call Option is exercisable at any time commencing on
October 1, 2010 and ending on and including December 31, 2010, up to the extent
that the Company has not previously exercised the Put Option in
full. The Put Option is exercisable at any time commencing on October
1, 2010 and ending on and including December 31, 2010, up to the extent that the
Investors have not previously exercised the Call Option in
full. However, the Investors shall have the right to terminate the
Put Option if they reasonably determine that a material adverse event, condition
or circumstance has occurred with respect to the prospects of the Company’s AEOL
10150 drug candidate for acute radiation syndrome; provided that the Company’s
failure to receive a grant or financing shall not, by itself, constitute a
material adverse event, condition or circumstance with respect
thereto.
In
connection with the Financing, the Company also entered into a Registration
Rights Agreement (the “Rights Agreement”) with the
Investors. Pursuant to the Rights Agreement, the Company agreed to
file one or more registration statements (collectively, the “Registration
Statements”) with the Securities and Exchange Commission (the “SEC”) covering
the resale of the Shares and all shares of common stock issuable upon exercise
of the Warrants (the “Registrable Securities”) upon demand of the holders of a
majority of the Registrable Securities (a “Demand
Registration”). Such holders have the right to two Demand
Registrations, subject to certain exceptions. In the event the
holders exercise their right to a Demand Registration, the Company has agreed to
file a Registration Statement to register the resale of the Registrable
Securities within a certain number of days after the request and to use
commercially reasonable efforts to cause the Registration Statement to be
declared effective by the SEC as soon as practicable after the filing
thereof. The Company also agreed to use its commercially reasonable
efforts to keep the Registration Statements effective for a specified
period. Pursuant to the Rights Agreement, the Company also granted
the Investors certain piggyback registration rights. The Rights
Agreement is filed as Exhibit 4.1 to this Current Report on Form 8-K and
incorporated herein by this reference.
The net
proceeds to the Company from the Financing, after deducting for expenses, were
approximately $950,000. The Company intends to use the net proceeds from the
Financing to fund the manufacture of AEOL 10150, studies of the efficacy of AEOL
10150 in cancer patients, the pre-clinical development of other Aeolus compounds
and ongoing operations of the Company.
The
Company did not use any form of advertising or general solicitation in
connection with the Financing.
The
securities described in this Item 1.01 above were offered and sold in reliance
upon exemptions from registration pursuant to Section 4(2) under the Securities
Act, and Rule 506 promulgated thereunder, and thus have not been registered
under the Securities Act. The securities may not be offered or sold in the
United States absent registration or an applicable exemption from the
registration requirements of the Securities Act.
Affiliates
of Xmark Opportunity Partners, LLC are the sole investors in the Financing.
Together with its affiliates, Xmark Opportunity Partners, LLC beneficially
owned approximately 67.5% of the Company's outstanding common stock prior to the
Financing. Xmark Opportunity Partners, LLC is the sole manager of
Goodnow Capital, L.L.C. and possesses sole power to vote and direct the
disposition of all securities of the Company held by Goodnow. Goodnow has the
right to designate up to two directors for election to the Company's Board of
Directors pursuant to the terms of a purchase agreement between Goodnow and the
Company. David C. Cavalier, a current director of the Company, is President of
Goodnow.
The
foregoing summary of the Purchase Agreement, Rights Agreement and Warrants is
qualified in its entirety by reference to the full texts of the Purchase
Agreement, the Rights Agreement and form of the Warrants attached as exhibits
4.1, 10.1 and 10.2, respectively, to this Current Report on Form 8-K and
incorporated herein by reference.
The
securities described in Item 1.01 above were offered and sold in reliance upon
exemptions from registration pursuant to Section 4(2) under the Securities Act,
and Rule 506 promulgated thereunder. The agreements executed in connection with
the Financing contain representations to support the Company’s reasonable belief
that each purchaser of the securities had access to information concerning the
Company’s operations and financial condition, each purchaser of the securities
acquired the securities for its own account and not with a view to the
distribution thereof in the absence of an effective registration statement or an
applicable exemption from registration, and that each purchaser of the
securities is sophisticated within the meaning of Section 4(2) of the Securities
Act and an "accredited investor" (as defined by Rule 501 under the Securities
Act). In addition, the issuances did not involve any public offering; the
Company made no solicitation in connection with the Financing other than
communications with the purchasers; the Company obtained representations from
each purchaser regarding its investment intent, experience and sophistication;
and each purchaser either received or had access to adequate information about
the Company in order to make informed investment decisions.
At the
time of their issuance, the securities were deemed to be restricted securities
for purposes of the Securities Act, and the certificates representing the
securities bear legends to that effect.
The
information set forth in Item 1.01 of this Form 8-K is incorporated into this
Item 3.02 by reference.
Item 8.01. Other
Events.
On August
12, 2010, the Company issued a press release announcing the completion of the
Financing. The text of the press release is set forth in Exhibit 99.1 attached
to this Form 8-K and incorporated herein by this reference. Exhibit
99.1 shall not be deemed “filed” for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended, or otherwise subject to the
liabilities of that section, nor shall such information be deemed incorporated
by reference in any filing under the Securities Act of 1933, as amended, except
as shall be expressly set forth by specific reference in such a
filing.
Item
9.01. Financial Statements and Exhibits.
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Exhibit #
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Description
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4.1
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Registration
Rights Agreement dated August 11, 2010 by and among the Company and the
investors whose names appear on the signature pages
thereof
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10.1
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Securities
Purchase Agreement dated August 11, 2010 by and among the Company and the
investors whose names appear on the signature pages
thereof
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10.2
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Form
of Warrant to Purchase Common Stock
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99.1
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Press
Release dated August 12,
2010
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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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AEOLUS
PHARMACEUTICALS, INC.
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Date: August
11, 2010
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/s/ John L. McManus
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John
L. McManus
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President
and Chief Executive Officer
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