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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
Current Report Filed Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report
(Date of Earliest Event Reported): June 17, 1996
SUNPHARM CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 0-27578 F593097048
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(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
4651 Salisbury Road, Suite 205, Jacksonville, Florida 32256
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(Address of principal executive offices) (Zip Code)
(904) 296-3320
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(Registrant's telephone number, including Area Code)
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Item 5. Other Events
The following unaudited pro forma balance sheet as of April 30, 1996
and statement of loss for the four month period ended April 30, 1996 have been
prepared to reflect certain capital and other transactions and events entered
into by SunPharm Corporation ("SunPharm" or the "Company") subsequent to April
30, 1996. These unaudited pro forma financial statements were prepared at the
request of The Nasdaq Stock Market, Inc. ("Nasdaq") in order to demonstrate the
Company's compliance with the minimum total asset and capital and surplus
requirements of Nasdaq.
This pro forma financial information is not necessarily indicative of
the results which actually would have occurred had the transactions been in
effect on the dates and for the periods indicated or which may result in the
future.
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Item 7. Financial Statements and Exhibits.
SUNPHARM CORPORATION
(A Development Stage Company)
UNAUDITED PRO FORMA CONDENSED BALANCE SHEET
<TABLE>
<CAPTION>
Pro Forma
April 30, Pro Forma for Capital
1996 Adjustments Transactions
---- ----------- ------------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents...........................
$584,999 $ 370,480 A $1,423,780
468,301 B
Receivables 500,000 C 500,000
Prepaid expenses and other current assets........... 206,963 206,963
------- --------- -------
Total current assets.......................... 791,962 1,338,781 2,130,743
------- --------- ---------
Receivable from stockholder............................ 10,000 10,000
Other assets........................................... 13,336 13,336
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$815,298 $1,331,781 $2,154,079
======== ========== ==========
LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)
Current Liabilities:
Accounts payable.................................... $446,958 $ $ 446,958
Accrued liabilities................................. 167,337 75,000 E 242,337
Accrued liabilities - litigation.................... 172,802 278,000 D 100,802
(350,000) D
Notes payable....................................... 49,461 49,461
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Total current liabilities..................... 836,558 3,000 839,558
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Stockholders' equity :
Undesignated series preferred stock, $.001 par
value, 2,500,000 shares authorized, none
issued and outstanding................................. __ __
Common stock, $.0001 par value 25,000,000
shares authorized, 2,884,535 and 3,319,758 (pro
forma) issued and outstanding, respectively........... 288 30 A,B 323
5 D
Additional paid-in capital............................. 9,642,434 838,751 A,B 10,756,180
349,995 D
(75,000) E
Deficit accumulated during development stage........... (9,663,982) 222,000 (9,441,982)
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Total stockholders' (deficit) equity ......... (21,260) 1,335,781 1,314,521
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$815,298 $1,338,781 $2,154,079
======== ========== ==========
</TABLE>
The accompanying notes are an integral part of these pro forma
financial statements.
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SUNPHARM CORPORATION
(A Development Stage Company)
UNAUDITED PRO FORMA STATEMENT OF LOSS
<TABLE>
<CAPTION>
Four Months Pro Forma
Ended April Pro Forma for Capital
30, 1996 Adjustments Transactions
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<S> <C> <C> <C>
Sponsored research/sublicensing revenues................ $ __ $ 500,000 C $ 500,000
Interest income......................................... 20,961 20,961
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Total revenues..................... 20,961 500,000 520,961
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Expenses:
Research and development............................ 518,398 518,398
General and administrative.......................... 406,525 278,000 D 684,525
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Total expenses.............................. 924,923 278,000 1,202,923
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Net loss................................................ ($903,962) $222,000 ($681,962)
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Net loss per share $(0.31) $(0.21)
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Shares used in computing loss per share................. 2,884,535 340,062 A,B,D 3,224,597
========= ======= =========
</TABLE>
The accompanying notes are an integral part of these pro forma
financial statements.
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SUNPHARM CORPORATION
(A Development Stage Company)
NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS
April 30, 1996
1. Description of Pro Forma Adjustments.
The accompanying unaudited pro forma balance sheet as of April 30, 1996 and
statement of loss for the four month period ended April 30, 1996 have been
prepared to reflect certain capital and other transactions and events entered
into by SunPharm Corporation ("SunPharm" or the "Company") subsequent to April
30, 1996. These unaudited pro forma financial statements were prepared at the
request of The Nasdaq Stock Market, Inc. ("Nasdaq") in order to demonstrate the
Company's compliance with the minimum total asset and capital and surplus
requirements of Nasdaq. This pro forma financial information is not necessarily
indicative of the results which actually would have occurred had the
transactions been in effect on the dates and for the periods indicated or which
may result in the future. The Company provided a plan to Nasdaq which
contemplates cash inflows to the Company through the private placement of equity
and other sources in an amount sufficient to bring the Company into compliance
by June 15, 1996, the date established by Nasdaq for final determination.
The Company is conducting a private placement (the "Offering") of equity to
raise between $2.0 and $3.0 million and has received $370,460 of proceeds
through June 14, 1996. Also, the Company has received subscription agreements
and commitments for an additional $449,955. The proceeds related to such
additional subscriptions are expected to be received prior to June 30, 1996 and
are not reflected in the pro forma balance sheet. SunPharm is offering an
aggregate 550,000 Units, at $5.50 per Unit, each consisting of one share of
SunPharm's Common Stock (the Common Stock) and one Warrant (the Warrant)
exercisable to purchase one share of Common Stock. The Company may, in its sole
discretion, elect to increase the size of the offering by up to an additional
363,636 Units or $2.0 million. Each Warrant is exercisable for a four-year
period to purchase one share of Common Stock at a per share price equal to $5.50
from the date of issuance of the Warrant until the first anniversary thereof,
$6.50 after the first anniversary thereof until the second anniversary thereof
and $7.50 for the remainder of the term, provided that the Warrants may be
redeemed by the Company after the first year under certain circumstances. The
terms of the Offering required the Company to sell a minimum of 90,909 Units
($500,000) to consummate the initial closing. The initial funds were deposited
and held in escrow until the minimum was raised, provided, that the Company has
received an aggregate of $1.5 million from all sources including this Offering
or otherwise certifies to the Escrow Agent that it is or will be in compliance
with the minimum listing requirements of the Nasdaq on June 15, 1996. SunPharm
has an obligation to file a registration statement with the Securities and
Exchange Commission within one year to register the shares issued in the
Offering.
Additionally, SunPharm has received $468,301 from an exchange offer made to
two (2) different groups of warrant holders. In the first exchange offer, the
Company offered a partnership which held 281,881 warrants to purchase Common
Stock at an average price of $2.50 per share, the opportunity to exercise those
warrants at an average price of $1.75 per share. Additionally, the warrant
holders will receive a new warrant, identical to the warrant included in the
Offering, for each four shares acquired by exercise of the existing warrant.
Through June 14, 1996, 159,843 warrants have been exercised. In the second
exchange offer, the Company offered investors who held 228,573 warrants to
purchase Common Stock at an average price of $4.38 per share, the opportunity to
exercise those warrants at an average price of $3.00 per share. Additionally,
the warrant holders will receive a new warrant, identical to the warrant
included in the Offering, for each four shares acquired by exercise of the
existing warrant. Through June 14, 1996, 62,859 warrants have been exercised.
Warner-Lambert Company ("Warner-Lambert") has agreed to pay SunPharm
$500,000, which represents a partial payment of the $1.0 million milestone due
from Warner-Lambert at the successful completion of the Phase 1 cancer trials.
The payment made by Warner-Lambert represents revenue earned for work previously
performed by the Company and is non-refundable. Additionally, the University of
Florida Research Foundation (UFRI) has agreed to forfeit any rights to receive a
28% royalty payment from SunPharm in connection with such $500,000 from
Warner-Lambert.
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SUNPHARM CORPORATION
(A Development Stage Company)
NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS
April 30, 1996
On June 13, 1996, SunPharm agreed to settle a lawsuit filed against the
Company and one of its directors by a shareholder. The claim, which was for
compensatory damages of over $41 million and punitive damages based upon an
alleged agreement between SunPharm and the shareholder, was settled for 50,000
shares of Company Common Stock. The Common Stock is to be issued immediately and
the Company has agreed to file an S-3 registration statement with the Securities
and Exchange Commission to register such shares for resale to the public.
2. Pro Forma Adjustments.
A. Recording of proceeds of $370,480 and the issuance of 67,360 shares of
Common Stock from the Offering discussed in Note 1. The Company has also
received subscriptions and commitments for an additional $449,955, which is
expected to be received prior to June 30, 1996. Such additional proceeds are not
included in the pro forma balance sheet.
B. Recording of proceeds of $468,301 and the issuance of 222,702 shares of
Common Stock from the warrant exercise offers discussed in Note 1.
C. Recording of the $500,000 payment from Warner-Lambert discussed in Note 1.
D. Recording the settlement of the lawsuit discussed in Note 1. The issuance
of 50,000 of Common Stock. The accrued liabilities related to this claim at
April 30, 1996 is $172,802, therefore an additional reserve of 178,000 is
required. The Company estimates the costs associated with registering such
shares to be approximately $50,000 and the legal fees to be incurred subsequent
to April 30, 1996 are estimated to be approximately $50,000. The total
adjustment to expense for this item is $278,000.
E. To record $75,000 of placement fees, legal fees and other costs to be
incurred in connection with the above transactions.
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Exhibits:
None
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.
SunPharm Corporation
STEFAN BORG
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Stefan Borg
President and Chief Executive Officer
(Principal Financial and Accounting Officer)
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