UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K/A
(Amendment
No. 1)
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 1, 2008
AEOLUS PHARMACEUTICALS,
INC.
(Exact
name of registrant as specified in its charter)
Delaware
(State or
other jurisdiction of incorporation)
0-50481 56-1953785
(Commission
File
Number) (IRS
Employer Identification No.)
23811
Inverness Place
Laguna
Niguel, California 92677
(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/A filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
£ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
£ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
£
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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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This Form
8-K/A amends and restates in its entirety the Current Report on Form 8-K filed
by Aeolus Pharmaceuticals, Inc. (the "Company") with the United States
Securities Exchange Commission on August 1, 2008 (the "Original Form 8-K")
in order to (i) report the execution by the Company and three accredited
institutional investors of an amendment to the Securities Purchase
Agreement reported in the Original Form 8-K, (ii) file such Securities Purchase
Agreement, as amended, as Exhibit 10.1 to this Form 8-K/A,
(iii) incorporate by reference in Exhibit 10.2 of this Form 8-K/A Exhibit
10.2 to the Original Form 8-K which reflects the form of Senior Convertible Note
issued to such investors on August 1, 2008, (iv) file a corrected version
of Exhibit 10.3 to the Original Form 8-K as Exhibit 10.3 to this
Form 8-K/A, and (v) file the form of Senior Convertible Note to be issued
in any subsequent closings as Exhibit 10.4 to this Form 8-K/A.
Item
1.01. Entry
into a Material Definitive Agreement.
On August
1, 2008, the Company entered into a Securities Purchase Agreement (the "Purchase
Agreement") with three accredited institutional investors (the
"Investors") pursuant to which the Company agreed to sell to the
Investors (and one or more additional accredited
investors) units comprised of senior unsecured convertible notes of
the Company (the "Notes"), in an aggregate principal amount of up to $5,000,000,
which shall bear interest at a rate of 7% per year and mature on the 30-month
anniversary of their date of issuance, and warrants to purchase up to an
aggregate of 10,000,000 additional shares of Common Stock (the "Warrant
Shares"), each with an initial exercise price of $0.50 per share, subject to
adjustment pursuant to the warrants (the "Warrants"). Each unit (collectively,
the "Units") is comprised of $1,000 in Note principal and Warrants to purchase
up to 2,000 shares of the Company's common stock, par value $0.01 per share (the
"Common Stock"), and has a purchase price of $1,000. The Company and the
Investors entered into Amendment No. 1 to the Purchase Agreement on August 4,
2008 ("Amendment No. 1"), pursuant to which the parties modified the dates
on which interest would accrue under Notes that may be issued after the date
hereof and further modified the related record dates for determining the parties
that would be entitled to receive such interest (such Amendment No. 1, together
with the Purchase Agreement, the "Amended Purchase Agreement").
On August
1, 2008, the Company sold and issued to the Investors 500 Units comprised of
Notes in the aggregate principal amount of $500,000 and Warrants to purchase up
to 1,000,000 shares of Common Stock for an aggregate purchase price of $500,000
(the "Financing"). The Notes and Warrants were issued pursuant to the
Amended Purchase Agreement. The Investors have also agreed, upon the
satisfaction of certain conditions by the Company pursuant to the Amended
Purchase Agreement, to purchase an additional 125 Units on each of September 2,
2008, October 1, 2008, November 3, 2008 and December 1, 2008 (the "Subsequent
Closings"), in each case for an aggregate purchase price of
$125,000. The Notes issued in the Financing and at the Subsequent
Closings have, or will have, an initial conversion price of $0.35 per share,
subject to adjustment pursuant to the Notes. In addition, the
Investors (and one or more additional accredited investors) have the option to
purchase up to an additional 4,000 Units, in one or more closings (each, an
"Election Closing"), and at their sole option at any time on or before February
1, 2010. The additional Units sold at an Election Closing would also be sold by
the Company at a purchase price of $1,000 per Unit, except that the initial
conversion price of the Notes issued in an Election Closing will equal the
volume weighted average closing sale price for the Common Stock for the sixty
consecutive trading day period ending on the trading day immediately preceding
such Election Closing, provided that such initial conversion price may not be
less than $0.20 per share or greater than $0.75 per share, in each case subject
to adjustment pursuant to the Note.
The Notes
will be convertible, at the Investors' sole election, into shares of Common
Stock at any time and from time to time. The conversion price of the
Notes (including the $0.20 floor and $0.75 ceiling price with respect to Notes
issued at Election Closings) and the exercise price of the Warrants are subject
to adjustment in the event of a stock dividend or split, reorganization,
recapitalization or similar event. Additionally, the conversion price
of the Notes and the exercise price of the Warrants may be reduced in the event
the Company issues securities at a price per share lower than the then current
conversion price of the Notes.
Interest
on the Notes accrues at the rate of 7.0% per annum from the date of issuance,
and is payable semi-annually, on January 31 and July 31 of each
year. Interest shall be payable, at the Company's sole election, in
cash or shares of Common Stock, to holders of Notes on the record date for such
interest payments, with the record dates being each January 15 and July 15
immediately preceding an interest payment date. If the Company elects to pay
interest in shares of Common Stock, it will have to notify the noteholders of
such election at least three business days prior to the record date for such
interest payment, and the number of shares to be issued will be determined by
dividing the amount of interest to be paid in shares by the volume weighted
average closing price over the 15 consecutive trading days period ending on the
fifth trading day immediately preceding the applicable interest payment
date.
The
Warrants are exercisable for a five year period from the date of issuance and
contain a "cashless exercise" feature that allows the Investors to exercise the
Warrants without a cash payment to the Company under certain
circumstances.
The
Amended Purchase Agreement, the form of Senior Convertible Note issued in the
Financing, the form of Warrant issued in the Financing and to be issued at each
Subsequent Closing and each Election Closing, and the form of Senior Convertible
Note to be issued at each Subsequent Closing and each Election Closing are filed
as Exhibits 10.1, 10.2, 10.3 and 10.4, respectively, to this Form 8-K/A and are
incorporated herein by reference. The foregoing description of the Amended
Purchase Agreement, the Notes and the Warrants and the transactions contemplated
thereby does not purport to be complete and is qualified in its entirety by
reference to these exhibits.
The
maturity of the Notes may be accelerated upon the occurrence of an event of
default, which includes, subject to certain grace periods, exceptions and
qualifications as set forth in the Notes, the failure by the Company to maintain
the listing of the Common Stock, the failure of the Company to deliver shares
Common Stock in a timely manner following a conversion, the failure of the
Company to have reserved a sufficient number shares of Common Stock to issue
upon conversion of the Notes, the failure by the Company to make payments on the
Notes in a timely manner, payment defaults by the Company or any of its
significant subsidiaries on debt or other obligations in excess of $100,000, the
occurrence of certain bankruptcy events with respect to the Company or its
significant subsidiaries, judgments rendered against the Company or its
significant subsidiaries in excess of $100,000 and breaches of material
representations, warranties or covenants by the Company under the Amended
Purchase Agreement or the Notes. Upon the occurrence of an event of default
related to a bankruptcy of the Company, the Notes shall immediately become due
and payable. Upon the occurrence of any event default other than a
bankruptcy event of default, the any holder of the Notes, in its sole
discretion, may declare this Note to be immediately due and payable and the
Company shall pay to the holder in cash the sum of all outstanding principal
multiplied by 115%, plus accrued and unpaid interest and late charges, if any,
thereon.
The Notes
also provide that the Company shall not perform certain activities without the
consent of the holders of Notes representing a majority of the then-outstanding
principal subject to the Notes. A complete list of these and other restrictive
covenants and affirmative covenants of the Company under the Notes are included
in the Notes, which are attached to this Form 8-K/A as Exhibits 10.2 (with
respect to Notes issued in the Financing) and 10.4 (with respect to Notes to be
issued at Subsequent Closings and Election Closings).
The
foregoing description does not purport to be complete and is qualified in its
entirety by reference to the Notes, which are attached to this Form 8-K/A as
Exhibits 10.2 (with respect to Notes issued in the Financing) and 10.4 (with
respect to Notes to be issued at Subsequent Closings and Election Closings), and
incorporated herein by reference.
Affiliates
of Xmark Opportunity Partners, LLC are the sole investors in the Financing.
Together with its affiliates, Xmark Opportunity Partners, LLC beneficially
owned approximately 50% 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.
Item
2.03. Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of the Registrant.
The
information set forth in Item 1.01 of this Form 8-K/A is incorporated into this
Item 2.03 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
of 1933, as amended (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 Investor had access to
information concerning the Company’s operations and financial condition, each
Investor 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 Investor 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 Investors;
the Company obtained representations from each Investor regarding its investment
intent, experience and sophistication; and each Investor 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/A is incorporated into this
Item 3.02 by reference.
Item 8.01 Other
Events.
On August
1, 2008, 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/A and incorporated herein by this reference.
Item
9.01. Financial Statements and Exhibits.
Exhibit
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Description
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10.1
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Securities
Purchase Agreement dated August 1, 2008 by and among the Company and the
investors whose names appear on the signature pages thereof, as amended by
Amendment No. 1 thereto dated August 4, 2008 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 Senior Convertible Note issued by the Company on August 1, 2008
(incorporated by reference to Exhibit 10.2 to the Company's Form 8-K dated
August 1, 2008).
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10.3
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Form
of Warrant to Purchase Common Stock
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10.4
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Form
of Senior Convertible Note
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99.1
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Press
Release dated August 1, 2008
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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.
AEOLUS PHARMACEUTICALS,
INC.
Date: August
4, 2008
/s/ Michael P.
McManus___________________
Michael
P. McManus
Chief
Financial Officer, Treasurer and Secretary