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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
FILED ON JUNE 29, 1998
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 16, 1998
TECHNICLONE CORPORATION
(Exact name of Registrant as specified in charter)
DELAWARE 0-17085 95-3698422
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification No.)
incorporation)
14282 FRANKLIN AVENUE, TUSTIN, CALIFORNIA 92780-7017
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (714) 508-6000
NOT APPLICABLE
(Former name or former address, if changed, since last report)
Page 1 of 88 Pages
Exhibit Index is on Page 4
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ITEM 5. OTHER EVENTS
On June 16, 1998, Techniclone Corporation, a Delaware corporation (the
"Registrant" or the "Company") and two (2) private investors ("Subscribers")
entered into a Regulation D Common Stock Equity Line Subscription Agreement, a
Registration Rights Agreement and a Warrant, pursuant to which the Company may,
in its sole discretion, and subject to certain restrictions, periodically sell
("Put") shares of the Company's Common Stock for up to $20,000,000 upon the
effective registration of such Put shares. At the time of each Put, the
Subscriber will be issued a Warrant which will give the holder the right, until
December 31, 2004, to purchase up to 10% of the amount of Common Stock issued
pursuant to the Put at the price paid for the Common Stock. After the Company
has an effective registration statement for the Put shares, unless an increase
is otherwise agreed to, $2,250,000 of Puts can be made every quarter, subject to
share issuance volume limitations identical to those set forth in Rule 144(e).
The number of shares of Common Stock to be issued on each Put will depend upon
the Market Price (as that term is defined in the Agreement) of the Common Stock
at the time of each Put. The Company is limited in the amount of the Put if the
price of the Common Stock is $1.00 or less and it is unable to make any Puts if
the minimum share price is $.50 or lower. At the time of each Put, each
Subscriber receives a discount of 15% from the then current Market Price. The
Company is required to pay placement agent fees consisting of cash, shares of
Common Stock and a Warrant to the Placement Agent on the closing of each Put. If
the Company does not exercise the full amount of its Put rights, then the
Company will issue "Commitment Warrants" on the first, second and third
anniversary of this Agreement. The amount of Commitment Warrants to be issued
will be equal to the difference of $6,666,666, $13,333,333 and $20,000,000
("Commitment Amounts"), respectively, less the actual cumulative total dollar
amount of Puts which have been exercised to such anniversary date. On each such
anniversary date the Company will issue that number of shares equal to ten
percent (10%) of the shares of Common Stock which would be issued by
subtracting the actual cumulative dollar amount of Puts for such anniversary
date from the Commitment Amounts on such anniversary date and dividing the
answer by the Market Price.
The Regulation D Common Stock Equity Line Subscription Agreement
provides for the Company to sell Common Stock to the Subscribers at times which
the Company decides is advantageous. The Equity Line Subscription Agreement is
not a credit instrument. Any Put exercised by the Company is a sale of Common
Stock and not a loan.
In connection with the issuance of shares of Common Stock pursuant to
the Equity Line Subscription Agreement, the Registrant agreed to pay the
placement agent a non-accountable expense allowance of 1% of the first
$10,000,000 raised, a cash commission of seven percent (7%) of the Purchase
Price of the Common Stock issued to the Subscribers, Common Stock equal to eight
percent (8%) of the Common Stock issued to the Subscribers, a Warrant to
purchase eight percent (8%) of the Common Stock issuable pursuant to the Warrant
issued to Subscribers, and after $10,100,000 is invested in the Company by
Subscribers, an additional non-accountable expense allowance of $100,000. As set
forth in the Agreement between the Company and the placement agent, the
placement agent will, in addition to assisting with the Equity Line Subscription
Agreement, provide the Company with investor relations services for one year.
On the first Put, the Company issued 2,545,454 restricted shares of the
Company's Common Stock for $3,500,000 pursuant to the Equity Line Subscription
Agreement ("Initial Tranche"). One half of the Initial Tranche is subject to
adjustment at three months after the effective date of the registration
statement registering these shares, and the second half of the initial tranche
will be subject to an adjustment at six months after such effective date
registering these shares. At each adjustment date, if the Market Price at such
three or six month period is less than the initial price paid for the Common
Stock ("Adjustment Price"), then for such half of the initial tranche, the
Company will be required to issue additional shares of Common Stock equal to the
difference between the amount of shares which would have been issued if the
price had been the Adjustment Price at the time of issuance, less the amount
originally issued. The Company also will be required to issue additional
Warrants at each three month and six month Adjustment Price for ten percent
(10%) of any additional shares issued.
The Company intends to use the proceeds of the offering to continue its
clinical trials of Oncolym(TM) and TNT and for general corporate and working
capital purposes.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
Listed below are the financial statements, pro forma financial
information and exhibits, if any filed as part of this report.
None
(c) EXHIBITS
EXHIBIT NO. DESCRIPTION
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4.4 Regulation D Common Stock Equity Line Subscription
Agreement.
4.5 Amendment to Regulation D Common Stock Equity Line
Subscription Agreement.
4.6 Registration Rights Agreement between the Registrant and
the Subscribers.
4.7 Form of Stock Purchase Warrant, to be issued to the
Subscribers.
99.1 Press Release dated June 16, 1998.
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.
TECHNICLONE CORPORATION
Date: June 26, 1998 By: /s/ Elizabeth Gorbett-Frost
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Elizabeth Gorbett-Frost, Chief
Financial Officer and Principal
Accounting Officer
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EXHIBIT INDEX
Listed below are the financial statements, pro forma financial information and
exhibits filed as part of this report.
SEQUENTIALLY
NUMBERED
EXHIBIT NO. DESCRIPTION PAGE
- ----------- ----------- ------------
4.4 Regulation D Common Stock Equity Line Subscription
Agreement. 5
4.5 Amendment to Regulation D Common Stock Equity Line
Subscription Agreement. 54
4.6 Registration Rights Agreement between the Registrant and
the Subscribers. 56
4.7 Form of Stock Purchase Warrant, to be issued to the
Subscribers. 76
99.1 Press Release dated June 16, 1998. 88
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