Attached files
| file | filename |
|---|---|
| EX-4.1 - PROTALEX INC | v166041_ex4-1.htm |
| EX-10.3 - PROTALEX INC | v166041_ex10-3.htm |
| EX-10.2 - PROTALEX INC | v166041_ex10-2.htm |
| EX-10.1 - PROTALEX INC | v166041_ex10-1.htm |
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): November 11, 2009
PROTALEX,
INC.
(Exact
Name of Registrant as Specified in Charter)
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DELAWARE
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000-28385
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91-2003490
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(State
or Other Jurisdiction
of
Incorporation)
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(Commission
File Number)
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(I.R.S.
Employer
Identification
No.)
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145
Union Square Drive
New
Hope, Pennsylvania
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18938
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(215)
862-9720
(Registrant’s
telephone number, including area code)
N/A
(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:
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¨
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Written
communications pursuant to Rule 425 under the Securities Act of 1933,
as amended (17 CFR 230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Securities Exchange Act of
1934, as amended (17 CFR 240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Securities
Exchange Act of 1934, as amended (17 CFR 240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Securities
Exchange Act of 1934, as amended (17 CFR
240.13e-4(c))
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Item
1.01
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Entry
into a Material Definitive
Agreement
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On November 11, 2009, pursuant to the
Note and Common Stock Purchase Agreement dated November 11, 2009 (the “Purchase
Agreement”) between Protalex, Inc., a Delaware corporation (“we,” “us,” our,” or
“Company”) and Niobe Ventures, LLC (the “Investor”), a Delaware limited
liability company and an accredited investor, as defined under Rule 501(a) of
the Securities Act of 1933, as amended (the “Act”), we issued to the Investor
(i) 43,478,260 shares of our common stock at a purchase price of $0.046 per
share (or $2,000,000 in the aggregate) and (ii) a senior secured convertible
promissory note in the principal amount of $1,000,000 and convertible into
shares of our common stock at an initial conversion price equal to $0.046 per
share (the “Secured Note”). The Secured Note bears interest at a rate
of 3% per annum and matures on November 13, 2012. We refer to this
transaction as the “Financing.”
In order to secure our obligations
under the Secured Note, we also entered into a Security Agreement dated November
11, 2009 (the “Security Agreement”) granting the Investor a security interest in
substantially all of our personal property and assets, including our
intellectual property.
As contemplated by the Purchase
Agreement, all of our executive officers and all of the members of our Board of
Directors (the “Board”) prior to the closing of the Financing, with the
exception of Frank M. Dougherty, resigned effective concurrently with the
closing of the Financing. Mr. Dougherty resigned effective upon the
expiration of the 10-day notice period required by Rule 14f-1 under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”). In
addition, effective upon the closing of the Financing, our Board appointed
Arnold P. Kling as a director and then elected him as president and elected Kirk
M. Warshaw as chief financial officer and secretary.
In addition, effective as of the
closing of the Financing on November 11, 2009 we terminated (i) that certain
Investor Rights Agreement dated September 18, 2003 and that certain Registration
Rights Agreement dated May 25, 2005, described in Item 1.02 below and (ii) stock
options exercisable for an aggregate of 1,233,571 shares of our common stock,
approximately 41% of our then outstanding stock options, all of which were held
by three option holders, Steven H. Kane, our former CEO, Marc L. Rose, our
former CFO and vSpring (defined in Item 1.02 of this report).
The foregoing descriptions of the
Secured Note, Purchase Agreement and Security Agreement are qualified in their
entirety by the full text of such agreements, which are filed as Exhibits 4.1,
10.1 and 10.2 hereto, respectively, and incorporated by reference
herein.
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Item
1.02
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Termination
of a Material Definitive Agreement
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Effective November 11, 2009, as a
condition to the closing of the Financing, we terminated that certain (i)
Investor Rights Agreement dated September 18, 2003 by and among Protalex, Inc.,
vSpring SBIC L.P. (“vSpring”) and certain of the investors set forth on Schedule
A thereto (the “2003 IRA”) and (ii) Registration Rights Agreement dated May 25,
2005 by and among Protalex, Inc., vSpring and certain of the investors set forth
on Schedule I thereto (the “2005 RRA”). Each was terminated in
accordance with its respective terms.
Under both the 2003 IRA and 2005 RRA,
we granted the investors registration rights (including demand registration
rights and piggyback registration rights), and agreed to not take certain
actions without their consent (such as the issuance of senior securities, or the
issuance more than $500,000 of debt securities, among other
items). We also agreed that we would repurchase their securities in
the event of a “Change in Control” as such term was defined in each agreement.
All of these obligations were terminated.
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The disclosure in Item 1.01 of this
Current Report on Form 8-K is incorporated by referenced into this
Item. The foregoing description of the 2003 IRA is qualified in its
entirety by the 2003 IRA, which was filed as Exhibit 4.3 to our Registration
Statement on Form SB-2 as filed with the United States Securities and Exchange
Commission (“SEC”) on October 20, 2003. The foregoing description of
the 2005 RRA is qualified in its entirety by the 2005 IRA, which was filed as
Exhibit 4.6 to our Registration Statement on Form SB-2 as filed with the SEC on
June 16, 2005.
Item
2.03 Creation of a Direct
Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of
a Registrant
On November 11, 2009, at the closing of
the Financing (described in Item 1.01, above), we issued the Secured
Note.
The Secured Note is convertible at any
time, at the option of the holder, subject only to the requirement that we have
sufficient authorized shares of common stock after taking into account all
outstanding shares of common stock and the maximum number of shares issuable
under all issued and outstanding convertible securities. In addition,
the Secured Note will automatically be converted if (i) we raise in excess of
$7.5 million of gross proceeds in an equity offering, (ii) certain milestones
are achieved in our Phase 1b and RA trial of PRTX-100 in South Africa or (iii)
we undertake certain fundamental transactions as defined in the notes (such as a
merger, sale of all of our assets, exchange or tender offer, or reclassification
of our stock or compulsory exchange). The Secured Note also provides
for the adjustment of the conversion price in the event of stock dividends and
stock splits, among other items, and provides for acceleration of maturity upon
an event of default (as defined in the Secured Note).
In order to secure our obligations
under the Secured Note, we also entered into the Security Agreement on November
11, 2009 granting the holder of the Secured Note a security interest
in substantially all of our personal property and assets, including our
intellectual property.
The disclosure in Item 1.01 of this
Current Report on Form 8-K is incorporated by reference into this
Item.
Item
3.02 Unregistered
Sale of Equity Securities
On
November 11, 2009, at the closing of the Financing, we issued 43,478,260 shares
of our common stock and the Secured Note (together, the “Securities”) to the
Investor for $3,000,000 in cash. The Purchase Agreement provides for
certain “piggyback” registration rights, which require us to register all the
shares of common stock sold in the Financing, including the shares issuable upon
conversion of the Secured Note, under the Act in certain
circumstances. The Securities have not been registered under the Act,
or state securities laws and may not be offered or sold in the United States
absent registration with the SEC or an applicable exemption from the
registration requirements.
The
Securities were issued in reliance upon the exemption from the registration
requirements of the Act pursuant to Section 4(6) and Rule 506 of Regulation D
thereof. The offer, sale and issuance of the Securities was made
without general solicitation or advertising. The Securities were
offered and issued only to “accredited investors” as such term is defined in
Rule 501 under the Act.
Neither
this Current Report on Form 8-K nor the exhibits attached hereto is an offer to
sell or the solicitation of an offer to buy shares of our common stock or any
other security.
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The disclosure in Item 1.01 of this
Current Report on Form 8-K is incorporated by reference into this
Item.
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Item
5.01
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Changes
in Control of Registrant
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Reference
is made to the disclosure set forth under Item 1.01 of this current report on
Form 8-K, which disclosure is incorporated herein by reference.
On
November 11, 2009, at the closing of the Financing, the Investor used its
working capital to acquire control of our company through the acquisition of
beneficial ownership of 65,217,390 shares of our common stock, our only voting
securities (including 21,739,130 shares of common stock issuable upon conversion
of the Secured Note), representing 69.5% of our outstanding common stock upon
the closing of the Financing.
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Item
5.02
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Departure
of Directors or Principal Officers; Election of Directors; Appointment of
Principal Officers
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On November 11, 2009, effective upon
the closing of the Financing, our Board appointed Arnold P. Kling as a director
and then elected him as president and elected Kirk M. Warshaw as chief financial
officer and secretary. With the exception of Frank M. Dougherty, all
of the Company’s directors and executive officers resigned on November 11, 2009
effective upon the closing of the Financing. Mr. Dougherty resigned
effective upon the expiration of the 10-day notice period required by Rule 14f-1
under the Exchange Act. In connection with and as a condition of
Messrs. Kling and Warshaw joining our Company we entered into an Indemnification
Agreement dated November 11, 2009 with each of them pursuant to which we agreed
to indemnify them to the maximum extent permitted by law. A copy of
their respective agreements is attached as Exhibit 10.3 hereto.
The principal occupation and brief
summary of the backgrounds of Messrs. Kling and Warshaw are as
follows:
Arnold P. Kling, age 51, has
served as our president and director since November 2009. Mr. Kling
is currently a (i) Manager of Niobe Ventures, LLC, a Delaware limited liability
company and (ii) Managing Director of GH Venture Partners, LLC, a private equity
and merchant banking boutique for which he also served as a Managing Director
and General Counsel from 1995 to 1999. From 1999 through August 2005,
Mr. Kling was the president of Adelphia Holdings, LLC, a merchant-banking firm,
as well as the managing member of several private investment
funds. From 1993 to 1995 he was a senior executive and general
counsel of a Nasdaq listed licensing and multimedia company. From
1990 through 1993, Mr. Kling was an associate and partner in the corporate and
financial services department of Tannenbaum, Helpern, Syracuse & Hirschtritt
LLP, a mid-size New York law firm. Mr. Kling received a Bachelor of
Science degree from New York University in International Business in 1980 and a
Juris Doctor degree from Benjamin Cardozo School of Law in 1983. Mr.
Kling currently also serves as a director and president of R&R Acquisition,
VI, Inc., R&R Acquisition, VII, Inc., R&R Acquisition, VIII, Inc.,
R&R Acquisition IX, Inc., R&R Acquisition X, Inc., Rodman International
Enterprises I, Ltd., Rodman International Enterprise II, Ltd., and Rodman
International Enterprise III, Ltd. (each a publicly reporting, non-trading
company), 24Holdings, Inc. (OTCBB:TWFH), Mattmar Minerals, Inc. (OTCBB:MTMS) and
Newtown Lane Marketing, Incorporated (OTCBB:NTWN).
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Kirk M. Warshaw, age 51, has
served as our chief financial officer and secretary, since November
2009. Mr. Warshaw is a financial professional who, since 1990, has
provided clients in a multitude of different industries with advice on
accounting, corporate finance, and general business matters. Prior to
starting his own consulting firm, from 1983 to 1990, he held the various titles
of controller, chief financial officer, president, and chief executive officer
at three separate financial institutions in New Jersey. From 1980
through 1983, Mr. Warshaw was a Senior Accountant at the public accounting firm
of Deloitte, Haskins & Sells. Mr. Warshaw is a 1980 graduate of
Lehigh University and has been a CPA in New Jersey since 1982. Mr.
Warshaw is currently also the chief financial officer of R&R Acquisition,
VI, Inc., R&R Acquisition, VII, Inc., R&R Acquisition, VIII, Inc.,
R&R Acquisition IX, Inc., R&R Acquisition X, Inc., Rodman International
Enterprises I, Ltd., Rodman International Enterprise II, Ltd., and Rodman
International Enterprise III, Ltd. (each a publicly reporting, non-trading
company), Mattmar Minerals, Inc. (OTCBB:MTMS) and Newtown Lane Marketing,
Incorporated (OTCBB:NTWN), and a director and the chief financial officer of
24Holdings Inc. (OTCBB:TWFH).
Family
Relationships
There
were no family relationships between or among any of our officers or directors
who served immediately prior to or after the closing of the
Financing.
Related
Person Transactions
Reference
is made to the disclosure set forth under Item 1.01 of this current report on
Form 8-K, which disclosure is incorporated herein by reference. Mr.
Kling is the manager of the Investor.
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Item
9.01
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Financial
Statements and Exhibits
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(d)
Exhibits.
EXHIBIT INDEX
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Exhibit
Number
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Description of Exhibits
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4.1
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Secured
Convertible Promissory Note dated November 11, 2009
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10.1
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Note
and Common Stock Purchase Agreement dated November 11, 2009, between the
Company and Niobe Ventures, LLC
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10.2
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Security
Agreement dated November 11, 2009, between the Company and Niobe
Ventures, LLC
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10.3
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Form
of Indemnification Agreement dated November 11, 2009 between the Company
and each of Messrs. Kling and
Warshaw
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* * * * * *
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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.
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PROTALEX,
INC.
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November
12, 2009
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By:
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/s/ Arnold P. Kling
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Arnold
P. Kling
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President
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