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): September 22, 2006
FERMAVIR PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
Florida | | 333-116480 | | 16-1639902 |
(State of Incorporation) | | (Commission File Number) | | (IRS Employer |
| | | | Identification No.) |
420 Lexington Avenue, Suite 445
New York, New York 10170
(Address of Principal Executive Offices)
(212) 413-0802
(Registrant’s telephone number, including area code)
(former name or former address, if changed since last report)
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:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.24d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.23e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
On September 22, 2006, FermaVir Pharmaceuticals, Inc., a Florida Corporation (the “Company”) entered into an agreement with an investor under which the investor agreed to purchase $75,000 principal amount of 8% notes due January 1, 2008 (the “New Notes”) and 112,500 warrants to purchase shares of the Company’s common stock for $1.00 per share until June 30, 2014 (the “2014 New Warrants”). More information concerning the terms of the Notes is set forth in Item 2.03 of this report.
On September 22, 2006, the Company entered into a Letter Agreement and Amendment Agreement (the “Amendment”) with certain investors (the “Prior Investors”) who participated in a private placement of the Company’s $325,000 principal amount 12% notes due January 1, 2007 (the “Prior Notes”) and warrants (the “Prior Warrants”) in June and July 2006 (the “Prior Placement”). Pursuant to the Letter Agreement, the Investors agreed to amend the Prior Notes by (i) extending the maturity date of the Prior Notes to January 1, 2008 (the “Maturity Date”), (ii) lowering the interest rate accruing on the principal amount of the Prior Notes from 12% per annum to 8% commencing as of September 1, 2006, (iii) increasing the financing trigger requiring mandatory redemption of the Prior Notes from two to three times the outstanding principal of the Prior Notes and (iv) lowering the optional redemption price of 106% of the principal amount of the Prior Notes, plus accrued interest to 103% of the principal for the period from July 1, 2007 to the Maturity Date. In addition, pursuant to the Amendment, the Investors agreed to amend the Prior Warrants by extending the expiration date of the Prior Warrants from June 30, 2012 to June 20, 2014. The Amendment essentially changed the terms of the Prior Notes and Prior Warrants to be equivalent to the New Notes and New Warrants, including extending the maturity date of the Prior Notes from January 1, 2007 to January 1, 2008.
In exchange for the Investors entering into the Amendment, the Company issued to each Investor 12.5 shares of common stock and 50 New Warrants for each $100 principal amount of Prior Notes acquired.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-
Balance Sheet Arrangement of a Registrant.
The information required to be disclosed in this Item 2.03 is incorporated herein by reference from Item 1.01. The Prior Notes and New Notes are collectively referred to in the report as the “Notes.” The Company may redeem the outstanding principal of the Notes, in whole or in part, pro rata or by lot for the consideration equal to 106% of the principal amount called for redemption from the date of issuance until June 30, 2007 and 103% of such principal amount from July 1, 2007 until maturity.
Further, if the Company receives gross proceeds from the sale of any securities (not including additional Notes) after the original issuance of the Notes, which in the aggregate exceeds three times the then outstanding principal amount of Notes, the Company is required to provide the Holder notice that all Notes shall be redeemed for a price equal to the outstanding principal and all accrued and unpaid interest which is payable five (5) days after such notice is or should have been given.
If any Event of Default (as defined in the Notes) occurs and continues, the holder or holders of at least 50.1% in aggregate principal amount of outstanding Notes may declare the entire outstanding principal balance of the Notes, and all accrued and unpaid interest the thereon, to be due and payable immediately. An Event of Default includes (a) the Company defaulting in the payment of principal or interest which continues for a period of five (5) days; or (b) any of the material representations or warranties made by the Company in the Notes, in the related Securities Purchase Agreement (which is filed as an exhibit to this report), or in any agreement, certificate or financial or other written statements furnished by the Company in connection with the execution and delivery of the Note or the Securities Purchase Agreement, shall be false or misleading in any material respect at the time made, and such default is not cured within 14 days of receipt of written notice specifying the nature of the misrepresentation; or (c) the Company (i) makes an assignment for the benefit of creditors or commence proceedings for its dissolution; or (ii) applies for or consents to the appointment of a trustee, liquidator or receiver for its or for a substantial part of its property or business; or (d) a trustee, liquidator or receiver is appointed for the Company or for a substantial part of its property or business without its consent and is
2
not be discharged within sixty (60) days after such appointment; or (e) any governmental agency or any court of competent jurisdiction at the instance of any governmental agency assumes custody or control of the whole or any substantial portion of the properties or assets of the Company and shall not be dismissed within sixty (60) days thereafter; or (f) any final money judgment, writ or warrant of attachment, or similar process in excess of Two Hundred Thousand ($200,000) Dollars in the aggregate is entered or filed against the Company or any of its properties or other assets and shall remain unpaid, unvacated, unbonded or unstayed for a period of sixty (60) days or in any event later than five (5) days prior to the date of any proposed sale thereunder; or (g) bankruptcy, reorganization, insolvency or liquidation proceedings or other proceedings for relief under any bankruptcy law or any law for the relief of debtors is instituted by or against the Company and, if instituted against the Company, is not be dismissed within sixty (60) days after such institution or the Company approves of, consents to, or acquiesces in any such proceedings or admits the material allegations of, or default in answering, a petition filed in any such proceeding.
Item 3.02 Unregistered Sales of Equity Securities
On September 22, 2006, the Company sold $75,000 principal amount of 8% notes due January 1, 2008 without discount, and 112,500 eight year New Warrants to purchase at an exercise price of $1.00 per share shares of the Company’s common stock, $.0001 par value to a single accredited investor In connection with the offer and sale of securities to the investor, the Company relied on the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 promulgated thereunder. The Company believes that the investor is an “accredited investor”, as such term is defined in Rule 501(a) promulgated under the Securities Act.
Pursuant to the Amendment discussed in Item 1.01 above, the Company issued 40,625 shares of common stock and 162,500 New Warrants to the Investors. In connection with the issuance of the securities to the Investors, the Company relied on the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”). The Company believes that the Investors are “accredited investors”, as such term is defined in Rule 501(a) promulgated under the Securities Act.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits.
4.1 Form of 8% Note of FermaVir Pharmaceuticals, Inc. due January 1, 2008.
4.2 Form of Warrant to purchase shares of Common Stock.
4.3 Form of Letter Agreement.
4.4 Form of Amendment Agreement.
3
