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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934*
ENDOREX CORP.
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(NAME OF ISSUER)
COMMON STOCK $.001 PER SHARE
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(TITLE OF CLASS OF SECURITIES)
29264N 307
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(CUSIP NUMBER)
ELAN INTERNATIONAL SERVICES, LTD.
C/O DAVID ROBBINS, ESQ., BROCK, FENSTERSTOCK, SILVERSTEIN & MCAULIFFE LLC
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(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED
TO RECEIVE NOTICES AND COMMUNICATIONS)
JANUARY 22, 1998
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(DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box.
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
(Continued on following pages)
Page 1 of 5 pages
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SCHEDULE 13D
CUSIP NO. 29264N 307 PAGE 2 OF 5 PAGES
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1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Elan International Services, Ltd.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO (See Item 3)
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Bermuda
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7 SOLE VOTING POWER
1,606,462 shares of common stock of the Issuer, par
value $.001 per share ("Common Stock"), consisting
of (i) 307,692 shares of Common Stock owned outright,
(ii) 1,068,000 shares of Common Stock issuable upon
conversion of 80,100 shares of Series B Preferred
NUMBER OF Stock, and (iii) a warrant to acquire up to 230,770
SHARES shares of Common Stock.
BENEFICIALLY ----------------------------------------------------------
OWNED BY
EACH 8 SHARED VOTING POWER
REPORTING
PERSON - 0 -
WITH ----------------------------------------------------------
9 SOLE DISPOSITIVE POWER
1,606,462 shares of Common Stock (see Item 7 above).
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10 SHARED DISPOSITIVE POWER
- 0 -
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,606,462 shares of Common Stock (see Item 7 above).
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.16% (based upon 9,736,641 outstanding shares of
Common Stock, as reported under Item 5 in the
Issuer's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1997.
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14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
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ITEM 1. SECURITY AND ISSUER.
Common Stock, par value $.001 per share
Endorex Corp.
900 North Shore Drive
Lake Bluff, Illinois 60044
ITEM 2. IDENTITY AND BACKGROUND.
This Form 13-D is filed by Elan International Services, Ltd., a Bermuda
corporation ("EIS"), 102 St. James Court, Flatts Smiths, SL 04, Bermuda. EIS
is a wholly-owned subsidiary of Elan Corporation, plc, Lincoln House, Lincoln
Place, Dublin 2, Ireland, an Irish public limited company ("Elan"). During the
last five years, none of the persons named above in this Item 2: (i) has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors); or (ii) was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction, as a result of which proceeding
he or she was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, United
States federal or state securities laws, or finding any violation with respect
to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
On January 22, 1998 (the "Closing Date"), in connection with a letter
agreement by and among EIS and Elan Corporation, plc, an Irish limited company
("Elan"), on the one hand, and the Issuer and Orasomal Technologies, Inc., a
Delaware corporation ("Orasomal"), on the other, dated December 31, 1997 (the
"Letter Agreement"), and the definitive documents executed on January 22, 1998
in respect of the transactions contemplated thereby, EIS has acquired 307,692
shares of Common Stock of the Issuer, 80,100 shares of Series B Convertible
Preferred Stock and a warrant to purchase up to 230,770 shares of Common Stock
at the exercise price of $10 per share, for an aggregate payment of
$10,010,000, which was provided by EIS's general corporate funds.
ITEM 4. PURPOSE OF TRANSACTION.
In connection with the transactions described in Item 3 above, the Issuer
and EIS agreed to establish a new joint venture company ("Newco"), initially
owned 80.1% by the Issuer and 19.9% by EIS. Newco has initially been
capitalized with $10,000,000, of which $8,010,000 has been provided by the
Issuer and $1,990,000 by EIS. Newco has been established principally to develop
and commercialize certain technology to be licensed to Newco by Elan, and
Orasomal, a majority-owned subsidiary of the Issuer (collectively, such
technologies, the "Technologies"), concurrently with the consummation of the
transactions contemplated by the Letter Agreement. In connection with such
transactions, (i) each of the Issuer and EIS has agreed, subject to the
provisions of the Letter Agreement, to provide certain funding to Newco in
connection with its business, (ii) the Issuer will use its best efforts to
cause a nominee of EIS to be appointed to the Issuer's board of directors and
(iii) EIS agreed that it will not acquire any additional voting securities of
the Issuer, other than as contemplated by the Letter Agreement, or take certain
other actions relating for a period of two years from the Closing Date.
Further, each of EIS and the Issuer has agreed to fund up to $1,500,000 of
Newco research and development expenses related to the commercialization of
products based upon the Technologies in the first year; thereafter such
expenses shall be funded in proportion to each party's ownership interest.
Except as set forth above, neither EIS nor Elan has a plan or proposal
which relates to or would result in:
(a) The acquisition by any person of additional securities of the Issuer,
or the disposition of securities of the Issuer;
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(b) An extraordinary corporate transaction such as a merger,
reorganization or liquidation involving the Issuer or any of its subsidiaries;
(c) A sale or transfer of a material amount of assets of the Issuer or any
of its subsidiaries;
(d) Any change in the present Board of Directors or management of the
Issuer, including any plans or proposals to change the number of or term of
Directors or to fill any existing vacancies on the Board;
(e) Any material change in the present capitalization or dividend policy
of the Issuer;
(f) Any other material change in the Issuer's business or corporate
structure;
(g) Changes in the Issuer's charter, by-laws, or instruments corresponding
thereto or other actions which may impede the acquisition of control of the
Issuer by any person;
(h) Causing the Common Stock to cease to be authorized to be
quoted in the inter-dealer quotation system of the National Association of
Securities Dealers, Inc.;
(i) To have the Common Stock terminated from registration under the
Securities Act of 1933; or
(j) Any action similar to any of those enumerated above.
ITEM 5. INTEREST IN THE SECURITIES OF THE ISSUER.
(a) through (d): See Item 3 above. EIS has sole power to vote and sole
authority to dispose or direct the dispositions of the entire amount of Common
Stock reported by this Schedule 13-D.
(e) Not Applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
The Letter Agreement; see Item 3 above. EIS and Endorex have executed: (i)
a Securities Purchase Agreement, (ii) a Subscription Agreement and Joint
Development and Operating Agreement in relation to their respective investment
in Newco (respectively, the "Subscription Agreement" and the "Development
Agreement"), and (iii) Registration Rights Agreements in connection with the
Common Stock and the shares of Newco common stock, par value $.001 per share.
Newco has executed license agreements with each of Elan and Orasomal in
connection with the Technologies, and is also a party to the Subscription
Agreement and Development Agreement and the Registration Rights Agreement in
respect of its common stock.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
1. Letter Agreement
2. Securities Purchase Agreement
3. Warrant
4. Registration Rights Agreement - Endorex
5. Newco Subscription Agreement
6. Registration Rights Agreement
7. Joint Development and Operating Agreement
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SIGNATURES
After reasonable inquiry and to the best of his knowledge and belief, the
undersigned certify that the information set forth in this Statement is true,
complete and correct.
Date: February 2, 1998
Elan International Services, Ltd.
By: /s/ Kevin Insley
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Kevin Insley
Director
