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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) January 29, 1999
NEOTHERAPEUTICS, INC.
(Exact name of registrant as specified in its charter)
Delaware 000-28782 93-0979187
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No)
157 Technology Drive, Irvine, California 92618
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (949) 788-6700
Not Applicable
(Former name or former address, if changed since last report)
Exhibit Index on Page 4
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ITEM 5. OTHER EVENTS
On January 29, 1999, NeoTherapeutics, Inc. (the "Company") entered into
a Preferred Stock Purchase Agreement with two institutional investors (the
"Agreement"). Pursuant to the Agreement, the Company issued and sold to the
investors shares of the Company's 5% Series A Preferred Stock with Conversion
Features ("Series A shares") and issued Warrants to purchase 75,000 shares of
common stock, for total consideration of $4.0 million. Under the Agreement, the
Company also has the option to sell $2.0 million of 5% Series B Preferred Stock
with Conversion Features ("Series B shares") to the investors commencing 180
days after January 29, 1999, subject to certain conditions contained in the
Agreement and the Certificate of Designation governing the Series A shares.
During the first 90 days after the closing, the Series A shares are
convertible only at an initial price of $13.06 per share of common stock (the
"fixed price"). Thereafter, the Series A shares are convertible in 25%
cumulative monthly increments at the lesser of the fixed price or at a variable
rate of 101% of the Per Share Market Value (as defined in the Agreement) of the
common stock at the time of conversion. In no event can the Series A shares be
converted into more than 1,450,000 shares of common stock. The Series B shares
will contain terms and conditions for conversion identical to the Series A
shares, except that the fixed conversion price of the Series B shares will be
set at 125% of the average Per Share Market Value of the common stock at the
time of the second closing. Dividends on both series of preferred stock are
payable in cash or in common stock, at the option of the Company, at the annual
rate of 5%. In connection with the purchase of the Series A shares, the
investors also received warrants to purchase 75,000 shares of common stock at
$12.98 per share for a period of 5 years. There are no warrants associated with
the Series B shares. Additional features of the preferred stock include, among
other things, a redemption feature at the Company's option if the common stock
trades below a floor or above a ceiling price and a prohibition on conversion
below a stipulated price. In connection with this financing, the Company paid a
finder's fee to an unrelated third party consisting of cash and warrants to
purchase common stock of the Company.
ITEM 7. EXHIBITS
Exhibits:
4.1 Certificate of Designation of 5% Series A Preferred Stock
with Conversion Features.
4.2 Preferred Stock Purchase Agreement dated as of January 29,
1999, by and among Registrant, Westover Investments L.P.
and Montrose Investments L.P.
4.3 Registration Rights Agreement dated as of January 29,
1999, by and among Registrant, Westover Investments L.P.
and Montrose Investments L.P.
4.4 Form of Warrant issued by Registrant to Westover
Investments L.P. and Montrose Investments L.P. dated as of
January 29, 1999.
99.1 Press Release dated February 2, 1999.
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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 thereunto duly authorized.
NEOTHERAPEUTICS, INC.
Date: February 8, 1999 By: /s/ SAMUEL GULKO
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Samuel Gulko
Chief Financial Officer
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EXHIBIT INDEX
Exhibits Description
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4.1 Certificate of Designation of 5% Series A Preferred Stock
with Conversion Features.
4.2 Preferred Stock Purchase Agreement dated as of January 29,
1999, by and among Registrant, Westover Investments L.P.
and Montrose Investments L.P.
4.3 Registration Rights Agreement dated as of January 29,
1999, by and among Registrant, Westover Investments L.P.
and Montrose Investments L.P.
4.4 Form of Warrant issued by Registrant to Westover
Investments L.P. and Montrose Investments L.P. dated as of
January 29, 1999.
99.1 Press Release dated February 2, 1999.
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