SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): August 28, 2003
MIRAVANT MEDICAL TECHNOLOGIES
(Exact name of Registrant as specified in its charter)
Delaware 0-2554 77-0222872
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification Number)
336 Bollay Drive
Santa Barbara, CA 93117
(Address of principal executive offices)
(805) 685-9880
(Registrant's telephone number, including area code)
ITEM 5. Other Events
Pharmacia Debt Termination
On August 28, 2003, Miravant Medical Technologies (the "Company") entered
into a Termination and Release Agreement with Pharmacia AB, a wholly owned
subsidiary of Pfizer, Inc. ("Pharmacia"), that provides, among other
things, for the retirement of the $10.6 million debt owed by the Company to
Pharmacia and the release of the related security collateral, in exchange
for a $1.0 million cash payment, 390,000 shares of the Company's common
stock and the adjustment of the of the exercise price of Pharmacia's
outstanding warrants to purchase shares of the Company's common stock.
Additionally, the Company will extend the expiration date of the warrants
to December 31, 2005. As a result, Pharmacia currently holds an aggregate
of 360,000 warrants to purchase shares of the Company's common stock at an
exercise price of $1.00 per share. The Company also granted Pharmacia
certain registration rights in connection with the shares of common stock
it received in this transaction.
Convertible Debt Financing
On August 28, 2003, the Company entered into a Convertible Debt and Warrant
Purchase Agreement (the "Convertible Debt Agreement") with a group of
private accredited investors (the "Investors"), pursuant to which the
Company issued securities to the Investors in exchange for gross proceeds
of $6.0 million. Under the Convertible Debt Agreement, the debt can be
converted, at the Investors' option, at $1.00 per share into the Company's
common stock. The Company will issue separate convertible promissory notes
("Convertible Notes") to each Investor and the Convertible Notes will earn
interest at 8% per annum and be due August 28, 2006, unless converted
earlier. The interest on each Convertible Note is due quarterly beginning
October 1, 2003 and can be paid in cash or in-kind at the Company's option.
Under certain circumstances each Convertible Note can be prepaid by the
Company prior to the maturity date or prior to conversion.
In connection with the borrowing, the Company will also issue to the
Investors warrants to purchase an aggregate of 4,500,000 shares of the
Company's common stock. Each Investor will receive two warrants. The first
warrant is for the purchase of one-half (1/2) of a share of the Company's
common stock for every $1.00 principal amount of debt under the Convertible
Debt Agreement. The second warrant is for the purchase of one-quarter (1/4)
of a share of the Company's common stock for every $1.00 principal amount
of debt under the Convertible Debt Agreement. The exercise price of each
warrant will be $1.00 per share and the warrants will terminate on August
28, 2008, unless previously exercised. The Company also granted the
Investors certain registration rights in connection with this transaction.
The 1/4 share warrant is mandatorly exercisable under certain
circumstances.
In connection with the execution of the Convertible Debt Agreement, certain
holders of notes (the "2002 Lenders") issued under the Company's December
2002 Convertible Debt and Warrant Agreement (the "2002 Debt Agreement")
have agreed to subordinate their debt security position to that of the new
Investors. In exchange for the subordinated security position, the 2002
Lenders will receive additional warrants to purchase an aggregate of
1,575,000 shares of the Company's common stock at an exercise price of
$1.00 per share, and these additional warrants will terminate on August 28,
2008, unless previously exercised. Additionally, under the anti-dilution
provision of the 2002 Debt Agreement, the conversion price of the five
notes issued thereunder to the 2002 Lenders during the period February 2003
through July 2003 will be reduced to $1.00 and the exercise price of the
related warrants issued to the 2002 Lenders during the same period will be
reduced to $1.00.
A copy of the Convertible Debt Agreement, the related forms of promissory
notes and warrants, the related registration rights agreement, the
subordination agreement with the 2002 Lenders, the Termination and Release
Agreement with Pharmacia, an amendment to Pharmacia's outstanding warrant
agreements and a side letter relating to this transaction are filed as
exhibits to this report and are incorporated by reference herein. The
foregoing descriptions of the above transactions and agreements does not
purport to be complete and are qualified in their entirety by reference to
the exhibits.
Pro Forma Disclosure (Unaudited)
The following unaudited consolidated pro forma condensed selected balance
sheet information as of June 30, 2003 presented below includes adjustments
for the events above related to the Termination and Release Agreement and
the Convertible Debt Financing, respectively, as if such event took place
at June 30, 2003:
Actual Pro Forma Pro Forma
June 30, 2003 Adjustments June 30, 2003
- ------------------------------------------ -- -------------------- --- -------------------- ----- -------------------
(Unaudited) (Unaudited) (Unaudited)
Cash................................ $ 76,000 $ 5,000,000 (1) $ 5,076,000
Current assets...................... 152,000 5,000,000 5,152,000
Deferred financing costs............ 1,299,000 3,742,000 (2) 5,041,000
Total assets........................ $ 3,575,000 $ 8,742,000 $ 12,317,000
==================== ==================== ===================
Short-term debt..................... $ 10,623,000 $ (10,623,000) (3) $ --
Long-term debt...................... 6,182,000 6,000,000 (4) 12,182,000
Total liabilities................... 19,125,000 (4,623,000) 14,502,000
Common stock........................ 181,173,000 9,265,000 (5) 190,438,000
Accumulated deficit................. (196,603,000) 4,100,000 (6) (192,503,000)
Total stockholders' equity (deficit) (15,550,000) 13,365,000 (2,185,000)
-------------------- -------------------- -------------------
Total liabilities and stockholders'
equity (deficit).................. $ 3,575,000 $ 8,742,000 $ 12,317,000
==================== ==================== ===================
(1) The $5,000,000 is net of the $6,000,000 cash received from the Convertible
Debt financing (including a $750,000 bridge loan received from an investor
prior to closing which was converted to the Convertible Debt financing on
closing) less the $1,000,000 paid to Pharmacia to terminate the $10,623,000
short-term debt.
(2) The $3,742,000 adjustment represents the Black-Scholes values for the
warrants issued to the Investors in connection with the Convertible Debt
Financing and to the Lenders for subordinating their existing debt, and the
lowering of the exercise price of the existing warrants held by the
Lenders. This amount is recorded as deferred financing costs to be
amortized over the term of the debt.
(3) The $10,623,000 represents the reduction of the debt due to Pharmacia.
(4) The $6,000,000 represents the amount of debt incurred from the Convertible
Debt financing.
(5) The pro forma adjustment to increase Common Stock by $9,265,000 represents
the following:
Fair market value of $1.00 for the 390,000 shares issued to Pharmacia...................$ 390,000
Black-Scholes value of reducing the exercise price of Pharmacia's existing warrants.....$ 151,000
Black-Scholes value of warrants issued in connection with the Convertible Debt..........$2,772,000
Black-Scholes value of warrants issued in connection with the 2000 Debt Agreement.......$ 970,000
Intrinsic value of the beneficial conversion feature of the Convertible Debt............$2,772,000
Intrinsic value of the beneficial conversion feature of the 2002 Debt Agreement.........$2,210,000
----------
Total adjustment to Common Stock.....................................$9,265,000
(6) The pro forma adjustment to decrease accumulated deficit by $4,100,000
represents the following:
Terminated short-term debt due to Pharmacia.............................................$ 10,623,000
Cash payment made to Pharmacia..........................................................$ (1,000,000)
Fair market value of $1.00 for the 390,000 shares issued to Pharmacia...................$ (390,000)
Black-Scholes value of reducing the exercise price of Pharmacia's existing warrants.....$ (151,000)
Intrinsic value of the beneficial conversion feature of the Convertible Debt............$ (2,772,000)
Intrinsic value of the beneficial conversion feature of the 2002 Debt Agreement.........$ (2,210,000)
--------------
Total adjustment to Accumulated Deficit..............................$ 4,100,000
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibit Number Exhibit
Exhibit 10.1 Convertible Debt and Warrant Purchase Agreement dated August 28, 2003 between the Registrant and
the Purchaser.
Exhibit 10.2 Subordination Agreement dated August 28, 2003 between the Registrant and the Purchaser.
Exhibit 10.3 Termination and Release Agreement dated August 13, 2003 between the Registrant and Pharmacia, AB
Exhibit 10.4 Side Letter Agreement dated August 28, 2003 between the Registrant and the Purchaser.
Exhibit 4.1 Form of Convertible Promissory Note between the Registrant and the Purchaser.
Exhibit 4.2 Form of 50% Warrant between the Registrant and the Purchaser.
Exhibit 4.3 Form of 25% Warrant between the Registrant and the Purchaser.
Exhibit 4.4 Registration Rights Agreement dated August 22, 2003 between the Registrant and the Purchaser.
Exhibit 4.5 Amendment to Registration Rights Agreement dated February 18, 1999.
Exhibit 4.6 Amendment to Warrant Agreements dated February 18, 1999.
Exhibit 99.1 Legal Opinion.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act or 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Miravant Medical Technologies
(Registrant)
Date: September 4, 2003
By: /s/ John M. Philpott
-------------------------
Name: John M. Philpott
Title: Chief Financial Officer
Exhibit Index
Exhibit Number Exhibit
Exhibit 10.1 Convertible Debt and Warrant Purchase Agreement dated August 28, 2003 between the Registrant and
the Purchaser.
Exhibit 10.2 Subordination Agreement dated August 28, 2003 between the Registrant and the Purchaser.
Exhibit 10.3 Termination and Release Agreement dated August 13, 2003 between the Registrant and Pharmacia, AB
Exhibit 10.4 Side Letter Agreement dated August 28, 2003 between the Registrant and the Purchaser.
Exhibit 4.1 Form of Convertible Promissory Note between the Registrant and the Purchaser.
Exhibit 4.2 Form of 50% Warrant between the Registrant and the Purchaser.
Exhibit 4.3 Form of 25% Warrant between the Registrant and the Purchaser.
Exhibit 4.4 Registration Rights Agreement dated August 22, 2003 between the Registrant and the Purchaser.
Exhibit 4.5 Amendment to Registration Rights Agreement dated February 18, 1999.
Exhibit 4.6 Amendment to Warrant Agreements dated February 18, 1999.
Exhibit 99.1 Legal Opinion.