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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): JUNE 19, 1995
SOMATIX THERAPY CORPORATION
(Exact name of registrant as specified in charter)
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<S> <C> <C>
DELAWARE 0-14758 94-2762045
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
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950 MARINA VILLAGE PARKWAY, ALAMEDA, CA 94501
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (510) 748-3000
_______________________________________________________________________________
(Former Name or Former Address, if Changed Since Last Report.)
Exhibit Index Located on Page 4
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ITEM 5 OTHER EVENTS.
Somatix Therapy Corporation (the "Company") today announced receipt of
commitments from institutional investors to purchase units in a private
placement (the "Offering") which would net the Company approximately $15
million. The Offering, which was managed by Merrill Lynch, involves the sale
of $10.1 million in common stock units of the Company (the "Common Stock
Units") and $6.4 million in convertible preferred stock units of the Company
(the "Preferred Stock Units"). The transaction is expected to close before the
end of June.
The Common Stock Units were priced at $3.68, and consist of one share of the
Company's common stock (the "Common Stock") and a warrant to purchase 0.56 of a
share of Common Stock. The Preferred Stock Units were priced at $25.00, and
consist of one share of the Company's convertible preferred stock (the
"Preferred Stock"), convertible to 6.25 shares of Common Stock at $4.00 per
share, and warrants for 3.5 shares of Common Stock. In both cases the warrants
have exercise prices of $4.00 per share and have three year terms. If all 2.4
million warrants were to be exercised, the Company would receive an additional
$9.8 million in proceeds.
The closing of the Common Stock Units portion of the transaction is
contingent upon the effectiveness of a Registration Statement on Form S-3.
The Preferred Stock Units have been sold as a private placement and are exempt
from registration under the Securities Act of 1933. However, the Company has
committed to register the underlying shares of Common Stock for resale within
60 days of closing. Both transactions are contingent upon the receipt of a
pending approval from the National Association of Securities Dealers.
In addition to the above terms, the Preferred Stock terms include a
paid-in-kind dividend of seven percent (7%), a liquidation preference,
extraordinary voting rights in the event the Company's net cash position falls
below $5 million, and a conversion price reset provision. The reset provision
states that 13 months after closing, the conversion price may be reset to the
lower of the current conversion price or the 20 day average closing price of
the Common Stock in the thirteenth month. The conversion price after reset may
not be less than $2.00 per share. Purchasers of the Preferred Stock Units have
agreed to certain trading restrictions during this measurement period.
Finally, the Preferred Stock will automatically convert to Common Stock at any
time after two and one-half years after closing if the Common Stock trades at a
100 percent premium to the then-applicable conversion price.
2.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
SOMATIX THERAPY CORPORATION
Date: June 19, 1995 By: /s/ DAVID W. CARTER
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David W. Carter, Chairman, President
and Chief Executive Officer
3.
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Exhibit Index
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EXHIBIT SEQUENTIALLY
NUMBER NUMBERED PAGE
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1. Press Release 5
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4.
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EXHIBIT 1
(BW) (SOMATIX) (SOMA) SOMATIX RECEIVES COMMITMENTS FOR $16.5 MILLION IN
PRIVATE PLACEMENT OF UNITS
Business Editors/Medical Writers
ALAMEDA, Calif.--(BUSINESS WIRE)--Somatix Therapy Corporation (NASDAQ:SOMA)
today announced receipt of commitments from institutional investors to purchase
units in a private placement which would net the company approximately $15
million. The offering, which was managed by Merrill Lynch, involves the sale
of $10.1 million in common stock units and $6.4 million in convertible
preferred stock units. The transaction is expected to close before the end of
June.
The units of common stock were priced at $3.68, and consist of one share of
common stock and a warrant to purchase 0.56 of a share of common stock. The
units of preferred stock were priced at $25.00, and consist of one share of
convertible preferred stock, convertible to 6.25 shares of common stock at
$4.00 per share, and warrants for 3.5 shares of common stock. In both cases
the warrants have exercise prices of $4.00 per share and have three year terms.
If all 2.4 million warrants were to be exercised, the company would receive an
additional $9.8 million in proceeds. The closing bid price of Somatix's common
stock on Friday, June 16, 1995, was $4.00 per share.
The closing of the common stock portion of the transaction is contingent
upon the effectiveness of a registration statement on form S-3, to be filed
with the SEC. The preferred stock has been sold as a private placement and is
exempt from registration under the Securities Act of 1933. However, the
company has committed to register the underlying shares of common stock for
resale within 60 days of closing. Both transactions are contingent upon the
receipt of a pending approval from the NASD.
"I am encouraged by the strong investor interest in this private placement,"
stated David W. Carter, Somatix's chairman and chief executive officer. "I
believe the success of this financing validates our decision to acquire Merlin
Pharmaceuticals Corporation earlier this year, completing the process of
bringing a broad base of in vivo gene transfer capabilities. We expect that
these new capabilities will shortly lead to concluding agreements with major
pharmaceutical companies."
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In addition to the above terms, the preferred stock terms include a
paid-in-kind dividend of 7 percent, a liquidation preference, extraordinary
voting rights in the event the company's net cash position falls below $5
million, and a conversion price reset provision. The resent provision states
that 13 months after closing, the conversion price may be reset to the lower of
the current conversion price or the 20 day average closing price of the common
stock in the thirteenth month. The conversion price after reset may not be
less than $2.00 per share. Purchasers of the preferred have agreed to certain
trading restrictions during this measurement period. Finally, the preferred
stock will automatically convert to common stock at any time after two and
one-half years after closing if the common stock trades at a 100 percent
premium to the then-applicable conversion price.
Somatix Therapy Corporation is a leader in the field of gene therapy. The
company intends to research, develop and commercialize proprietary processes
for the genetic modification of cells and their use in the treatment of human
disease. Somatix' assets include its highly efficient gene transfer
technology, broad-based intellectual property and product development programs
focused on cancer, neural diseases and hemophilia.
CONTACT: Somatix Therapy Corporation, Alameda
Mark Bagnall, 510/748-3064
2.
