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
May 26, 2006
Date of Report (Date of earliest event reported)
Innovate Oncology, Inc.
(Exact name of registrant as specified in its charter)
Nevada 33-55254-28 87-0438641
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification Number)
4660 La Jolla Village Drive, Suite 420, San Diego, California 92122
(Address of Principal Executive Offices) (Zip Code)
858-458-6807
(Registrant's telephone number, including area code)
712 Fifth Avenue, 19th floor, New York, New York 10019-4108
(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:
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Section 1 - Registrant's Business and Operations
Item 2.01. Completion of Acquisition or Disposition of Assets.
On May 26, 2006, registrant consummated the acquisition (the "Acquisition") from
Avantogen Limited ("Avantogen") of the 50% interest in Resistys, Inc. not
already owned by registrant, together with $1.1 million in cash, in exchange for
32 million shares of registrant's common stock, par value $0.001 per share, (the
"Common Stock"), resulting in Avantogen owning approximately 54.24% of the
outstanding Common Stock of registrant on a fully diluted basis after the
closing of the Acquisition.
Section 3 - Securities and Trading Markets
Item 3.02. Unregistered Sales of Equity Securities.
In connection with the Acquisition, on May 26, 2006 registrant issued 32 million
shares of its Common Stock to Avantogen in exchange for Avantogen's 50% interest
in Resistys, Inc. and $1.1 million in cash. The issuance of the shares was
exempt from registration in accordance with Section 4(2) of the Securities Act
of 1933 as a transaction by registrant not involving any public offering.
Section 5 - Corporate Governance and Management
Item 5.01. Changes in Control of Registrant.
A change in control of the registrant occurred as of May 26, 2006 as a result of
the consummation of the Acquisition pursuant to which registrant issued to
Avantogen 32 million shares of its Common Stock, constituting approximately
54.24% of its Common Stock, and Avantogen exercised its right to designate three
(3) of the five (5) members of registrant's Board of Directors. Immediately
prior to the consummation of the Transaction, registrant was controlled, both on
the basis of security ownership and Board composition, by Gardant
Pharmaceuticals, Inc. (formerly known as Bioaccelerate Holdings, Inc.)
("Gardant"). Gardant, Avantogen and registrant are parties to a Voting Agreement
dated as of May 26, 2006, pursuant to which Avantogen will vote its shares in
favor of two (2) designees of Gardant to serve as directors of the registrant
for so long as Gardant owns at least twenty percent (20%) of registrant's
capital stock. The Voting Agreement also provides that, for so long as Gardant
owns at least twenty percent (20%) of registrant's capital stock, registrant
will not, without first obtaining the approval of Gardant and Avantogen, and
Gardant and Avantogen agree that, without the prior consent of the other,
neither will vote or act with respect to its equity interests in registrant so
as to, cause any of the following actions to be taken: (a) the liquidation,
dissolution or winding up of registrant, (b) any bankruptcy filing of
registrant, (c) the sale of all or substantially all of registrant's assets to
Gardant, Avantogen or their affiliates, (d) the merger or consolidation of
registrant into Gardant, Avantogen or their affiliates, (e) the conversion of
registrant into another form of business, (f) engagement by registrant in a
business other than in the life sciences field, (g) the issuance of shares of
registrant's capital stock to Gardant, Avantogen or their affiliates at below
fair market value or otherwise without adequate consideration, (h) a change in
the size of registrant's Board of Directors, (i) the redemption or repurchase of
any shares of registrant's capital stock owned by Gardant, Avantogen or their
stockholders or affiliates, (j) the engagement by registrant in any
related-party transactions with Gardant, Avantogen or their affiliates or (k)
the entry by registrant into any third party transaction in which Gardant or
Avantogen receives a benefit that does not inure to the benefit of registrant or
its shareholders as a group. The foregoing summary of the provisions of the
Voting Agreement does not purport to be complete and is qualified in its
entirety and incorporated by reference to the full text thereof filed as Exhibit
10.1 hereto.
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Item 5.02. Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers.
Upon the consummation of the Acquisition on May 26, 2006, Linden J. Boyne,
registrant's Interim Chief Executive Officer and a director, Alan Bowen,
registrant's Chief Financial Officer, Treasurer and a director, and Paul Hopper,
registrant's Chairman of the Board and President, all resigned from such
positions. At the same time, Dr. Richard Opara, Chairman of Avantogen, was
appointed as registrant's Chairman of the Board, Christopher Nowers was
appointed as registrant's Chief Executive Officer and a director, and Joseph
Boystak, Chief Executive Officer of Chopin Capital Partners, LLC, a private
equity partnership in Los Angeles and formerly Managing Director, Life Sciences,
for Jefferies & Company, Inc., and Lee Cole, Chairman of Gardant, were appointed
as directors of registrant. Gardant is the owner of 24,721,758 shares of
registrant's Common Stock, constituting approximately 41.9% of its Common Stock,
and, prior to the Acquisition, provided registrant with a $5 million secured
credit facility. The credit facility was terminated in April, 2006, and no
amounts remain due to Gardant thereunder. Dr. Nigel Rulewski, a current director
of registrant, will continue as a director designated by Gardant. Dr. Opara, Mr.
Nowers and Mr. Boystak are the director-designees of Avantogen, and Mr. Cole and
Dr. Rulewski are the director-designees of Gardant.
Mr. Nowers, registrant's new Chief Executive Officer, has nearly twenty (20)
years of biopharmaceutical experience involved in the commercialization of
products in oncology and other therapy areas Since April 2001, Mr. Nowers held a
variety of senior management positions at Amgen Inc. and Amgen Europe, including
General Manager (Nordic Region), European Business Director (Rheumatology),
Global Commercial Leader (Neurology) and Brand Director USA (Nephrology).
Registrant and Mr. Nowers have entered into an Employment Agreement dated as of
May 26, 2006 pursuant to which Mr. Nowers will serve as registrant's Chief
Executive Officer for an initial term of three (3) years, subject to automatic
renewal from year to year thereafter, at a base salary of $300,000 per year.
Subject to the achievement of certain milestones, registrant will also grant Mr.
Nowers stock options aggregating 7% of the outstanding Common Stock of
registrant on a fully-diluted basis. Mr. Nowers' employment may be terminated by
registrant with or without Good Cause (or by Mr. Nowers with or without Good
Reason). In the event of termination by registrant without Good Cause or by Mr.
Nowers with Good Reason, registrant will pay Mr. Nowers a lump sum severance
amount equal to one year's salary and continue his medical and dental benefits
for one year from the date of termination, and all of Mr. Nowers' unvested stock
options will immediately vest. The foregoing summary of the terms and conditions
of the Employment Agreement does not purport to be complete and is qualified in
its entirety and incorporated by reference to the full text thereof filed as
Exhibit 10.2 hereto.
Section 8 - Other Events
Item 8.01. Other Events.
The Company issued a press release on May 26, 2006 announcing the closing of the
Acquisition. That press release is filed as Exhibit 99.1 to this Current Report
on Form 8-K and is incorporated herein by reference.
Section 9 - Financial Statements and Exhibits
Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
Financial statements of the business acquired which are required by this item
are not included with this initial report on Form 8-K but will be filed not
later than August 11, 2006.
(b) Pro Forma Financial Information.
Pro forma financial information relative to the business acquired which is
required by this item is not included with this initial report on Form 8-K but
will be filed not later than August 11, 2006.
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(d) Exhibits.
The following exhibits are filed with this report:
10.1 Voting Agreement dated as of May 26, 2006 by and among Innovate
Oncology, Inc., Gardant Pharmaceuticals, Inc. and Avantogen Limited.
10.2 Employment Agreement dated as of May 26, 2006 between Innovate
Oncology, Inc. and Christopher Nowers.
99.1 Press release dated May 26, 2006
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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.
Innovate Oncology, Inc.
By: /s/ Christopher Nowers
---------------------------
Christopher Nowers
Chief Executive Officer
Date: June 2, 2006
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Exhibit Index
10.1 Voting Agreement dated as of May 26, 2006 by and among Innovate
Oncology, Inc., Gardant Pharmaceuticals, Inc. and Avantogen Limited.
10.2 Employment Agreement dated as of May 26, 2006 between Innovate
Oncology, Inc. and Christopher Nowers
99.1 Press release dated May 26, 2006