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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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): May 21, 1997
CYTRX CORPORATION
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(Exact Name of Registrant as Specified in Charter)
Delaware 000-15327 58-1642740
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(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
154 Technology Parkway
Norcross, Georgia 30092
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(Addresses of Principal Executive Offices, including Zip Code)
(770) 368-9500
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(Registrant's Telephone Number, including Area Code)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On May 21, 1997 (the "Closing Date"), pursuant to the Agreement and
Plan of Merger and Contribution dated December 6, 1996 (the "Merger Agreement"
attached hereto as Exhibit 2.1 and incorporated herein by reference), among
Zynaxis, Inc., a Pennsylvania corporation ("Zynaxis"), CytRx Corporation, a
Delaware corporation ("CytRx"), Vaxcel, Inc., a Delaware corporation and a
wholly-owned subsidiary of CytRx ("Vaxcel"), and Vaxcel Merger Subsidiary, Inc.,
a Georgia corporation and a wholly-owned subsidiary of Vaxcel formed for the
purpose of consummating the transaction ("Merger Sub"), Merger Sub was merged
with and into Zynaxis (the "Merger") and each share of capital stock of Zynaxis
was converted into the right to receive shares of common stock of Vaxcel, par
value $.001 per share ("Vaxcel Common Stock"). Specifically, each share of
common stock of Zynaxis, par value $.01 per share ("Zynaxis Common Stock")
issued and outstanding immediately prior to the Closing Date (excluding certain
shares as set forth in the Merger Agreement), was exchanged for the right to
receive .0947 (the "Exchange Ratio" as further described in the Merger
Agreement) shares of Vaxcel Common Stock, with cash being paid in lieu of any
fractional shares. In addition, each share of Series A Convertible Preferred
Stock of Zynaxis, no par value ("Zynaxis Preferred Stock") issued and
outstanding immediately prior to the Closing Date (excluding certain shares as
set forth in the Merger Agreement), was exchanged for the right to receive .1894
(i.e., two times the Exchange Ratio) shares of Vaxcel Common Stock, with cash
being paid in lieu of any fractional shares.
Furthermore, on the Closing Date, CytRx contributed to Vaxcel a credit
facility (the "Senior Credit Facility") and a cash payment of $2,300,010 (the
"Cash Payment"). The Senior Credit Facility was delivered to CytRx concurrently
with the execution of the Merger Agreement in exchange for which CytRx provided
Zynaxis with working capital of up to $2,000,000 pending consummation of the
Merger. The Senior Credit Facility is comprised of a secured note, certain
security agreements, and a secured loan agreement. In exchange for the
contribution of the Senior Credit Facility and the Cash Payment, Vaxcel
delivered to CytRx a warrant to purchase shares of Vaxcel Common Stock (the
"CytRx Warrant") and 1,374,996 shares of Vaxcel Common Stock. The CytRx Warrant
has an exercise price equal to one-half of the Per Share Price of $.2754 (as
further described in the Merger Agreement) multiplied by the Exchange Ratio, and
may be exercised if, and only if, CytRx reasonably determines that Vaxcel's
total assets and capital and surplus are insufficient to satisfy the total
assets and capital surplus requirements for inclusion of Vaxcel Common Stock on
the Nasdaq SmallCap Market.
In addition to the foregoing, upon consummation of the Merger, holders
(the "Financing Warrantholders") of warrants to purchase shares of Zynaxis
Common Stock who were parties to that certain Preferred Stock and Warrant
Agreement, executed concurrently with the Merger Agreement, by and among
Zynaxis, CytRx, Vaxcel and each of the Financing Warrantholders (the "Preferred
Stock and Warrant Agreement" attached hereto as Exhibit 2.2 and incorporated
herein by reference), were granted the right to receive warrants to purchase
shares of Vaxcel Common Stock in accordance with the terms of the Preferred
Stock and Warrant Agreement.
Also, on the Closing Date holders of warrants (the "Non-Financing
Warrants") to purchase Zynaxis Common Stock who were not parties to the
Preferred Stock and Warrant Agreement were issued, in exchange therefor,
warrants to purchase Vaxcel Common Stock, substantially in the form of their
Non-Financing Warrants, except that (i) each Non-Financing Warrant assumed by
Vaxcel is exercisable solely for shares of Vaxcel Common Stock, (ii) the number
of shares of Vaxcel Common Stock subject to such Non-Financing Warrant is equal
to the number of shares of Zynaxis Common Stock subject to such Non-Financing
Warrant prior to the Closing Date multiplied by the Exchange Ratio, and (iii)
the per share
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exercise price under each such Non-Financing Warrant was adjusted by dividing
the per share exercise price under each such Non-Financing Warrant prior to
Closing by the Exchange Ratio and rounding up to the nearest cent.
Additionally, on the Closing Date, holders of options to purchase
shares of Zynaxis Common Stock ("Stock Options") granted pursuant to the
Zynaxis, Inc. Amended and Restated 1989 Stock Option Plan ("Stock Plan") were
granted rights with respect to the Vaxcel Common Stock, and Vaxcel assumed each
such Stock Option in accordance with the terms of the Stock Plan, except that
(i) Vaxcel and its compensation committee was substituted for Zynaxis and the
committee of Zynaxis' Board of Directors administering the Stock Plan, (ii) each
Stock Option assumed by Vaxcel is exercisable solely for shares of Vaxcel Common
Stock, (iii) the number of shares of Vaxcel Common Stock subject to the Stock
Option is equal to the number of shares of Zynaxis Common Stock subject to such
Stock Option immediately prior to the Closing Date multiplied by the Exchange
Ratio, and (iv) the per share exercise price under each such Stock Option was
adjusted by dividing the per share exercise price under each such Stock Option
immediately prior to the Closing Date by the Exchange Ratio and rounding up to
the nearest cent.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION, AND EXHIBITS.
(a) Financial Statements of Businesses Acquired.
1. Audited balance sheets of Zynaxis as of the end of
each of the two most recent fiscal years (including
1995 and 1996).
2. Audited statements of income and cash flows of
Zynaxis for each of the three fiscal years preceding
the date of the most recent audited balance sheet
(including 1994, 1995, 1996).
The required financial statements will be filed no later than
August 4, 1997 (sixty days after the initial report on Form
8-K must be filed, June 5, 1997)
(b) Pro Forma Financial Information.
1. Pro forma condensed balance sheet of Zynaxis as of
the end of the most recent period for which a
consolidated balance sheet of Zynaxis is required
(1996 to the present).
2. Pro forma condensed statements of income for only the
most recent fiscal year (1996).
The required pro forma financial information will be filed no
later than August 4, 1997.
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(c) Exhibits.
2.1 Agreement and Plan of Merger and Contribution dated
as of December 6, 1996, among the Registrant, Vaxcel,
Inc., Vaxcel Merger Subsidiary, Inc. and Zynaxis,
Inc.
2.2 Preferred Stock and Warrant Agreement dated as of
December 6, 1996, among the Registrant, Zynaxis,
Inc., Vaxcel, Inc. and each of the holders of
Zynaxis, Inc. warrants signatory thereto.
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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.
CYTRX CORPORATION
(REGISTRANT)
Date: June 3, 1997 By: /s/ Jack J. Luchese
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Jack J. Luchese, Chairman, President and Chief
Executive Officer (Principal Executive Officer)
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INDEX TO EXHIBITS
Sequential
Exhibit Page No.
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2.1 Agreement and Plan of Merger and Contribution dated as of December 6,
1997, among the Registrant, Vaxcel, Inc., Vaxcel Merger Subsidiary, Inc.
and Zynaxis, Inc.
2.2 Preferred Stock and Warrant Agreement dated as of December 6, 1996, among
the Registrant, Zynaxis, Inc. Vaxcel, Inc. and each of the holders of
Zynaxis, Inc. warrants signatory thereto.
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